The emphasis on short term credit lines was also a questionable choice of finance structuring. Expansionary/market penetrating strategies typically pan out by taking losses in the short term in order to realize larger gains in the long term. Along with an expansionary strategy, Massey Ferguson was also increasing spending in R&D for production of higher horsepower tractors to market in North America and for diesel engine production in its Perkins Group. Historically R&D expenditures do not realize gains in short term time horizons. This misalignment in cash flow timing most definitely is not optimal for maintaining a healthy capital structure.
MF should change its financial