India, Aug. 21 -- The recent suicide by Cafe Coffee Day owner jolted every coffee lover in the country and brought to the fore the grim reality that high debt can be dangerous for a company. A business is said to be overleveraged when it carries too much debt and is unable to make interest payments on loans and meet other expenses.

Overleveraged companies are often unable to pay operating expenses because of the burden brought on by debt in the form of interest payments and principal repayments. Overleveraging can sometimes lead to a downward financial spiral where the company cannot generate enough revenue to make the debt payments and pay its usual operating expenses. This leads to the company having to borrow more to stay in operation...