Remember balance sheet efficiency? This was one of the countless virtues, much trumpeted in business schools, that private equity was supposed to bring to the quoted corporate sector. It turned out to be largely claptrap, as the debris from numerous leveraged buy-outs bears witness. The academics were doing a splendid job in softening up business on private equity’s behalf, but performing a singular disservice to the wider community in peddling their intellectually toxic wares.

As financial nostrums go – and it has pretty much gone now – the concept of the efficient balance sheet was not entirely loopy. It had its roots in the celebrated theorem of Franco Modigliani and Merton Miller, which asserts that capital structure is an irrelevance. Whether the business is financed by debt or equity should not, according to the M&M theorem, affect its market value.