Financial leverage,
Definition of Financial leverage:
The use of borrowed money to increase production volume, and thus sales and earnings. It is measured as the ratio of total debt to total assets. The greater the amount of debt, the greater the financial leverage.
Since interest is a fixed cost (which can be written off against revenue) a loan allows an organization to generate more earnings without a corresponding increase in the equity capital requiring increased dividend payments (which cannot be written off against the earnings). However, while high leverage may be beneficial in ■■■■ periods, it may cause serious cash flow problems in recessionary periods because there might not be enough sales revenue to cover the interest payments. Called gearing in UK. See also investment leverage and operating leverage.
How to use Financial leverage in a sentence?
- If you have strong financial leverage you will have the upper hand in a negotiation and be able to set the price.
- We thought we would have a lot more financial leverage with the money we borrowed and it would help us out.
- If you find yourself negotiating with someone that has the financial leverage you must try to not let them figure it out.
Meaning of Financial leverage & Financial leverage Definition
Financial Leverage,
How To Define Financial Leverage?
Ability to increase shareholders' profits by generating assets in excess of interest payments on debt financing
Use of borrowed capital to increase expected returns on equity. Financial leverage is measured using equity ratio in addition to debt / debt.
Literal Meanings of Financial Leverage
Financial:
Meanings of Financial:
Financial or financial status of an organization or person.
In terms of finances.
Sentences of Financial
You just have to be more discriminating with the help you render toward other people.
Independent financial advisor
Synonyms of Financial
monetary, banking, fiscal, budgetary, pecuniary, business, economic, commercial, investment, money, accounting
Leverage:
Meanings of Leverage:
Use the borrowed capital for (investment) and expect the income to be higher than the interest paid.
Use (some) fully.
Use of force The use of force by a lever or an object.
The ratio between the debt of a company and the value of its common stock (equity)
Sentences of Leverage
Without a clear legal claim on their property, they have property that cannot be used as a mortgage for a loan.
The organization should use its basic resources
My digger has found something solid that doesn't respond to levers
Synonyms of Leverage
purchase, grasp, hold, grip
Financial Leverage,
Financial Leverage Definition:
Financial Leverage definition is: Ability to increase shareholders' income by earning more in ETS than repaying interest on the loan to fund ETS.
Financial Leverage means, Use of borrowed capital to increase expected returns on equity. Financial leverage is measured using debt / debt plus equity ratio.
Literal Meanings of Financial Leverage
Financial:
Meanings of Financial:
With regard to financial matters
Financial status or financial status of an organization or person.
Sentences of Financial
You need to be careful about your finances, especially about your cash flow.
Leverage:
Meanings of Leverage:
Trying to use the lever
The ratio between the company's borrowed capital (debt capital) and the value of its ■■■■■ stock (share capital).
Use of leverage for (investment) in the hope that the return will be higher than the interest payable.
Make the most of something)
Sentences of Leverage
My digger found something solid that doesn't respond to levers.
Without a clear legal claim on their property, they have property that cannot be used as collateral for a loan.
The organization must use its basic resources.
Synonyms of Leverage
force, anchorage, support, attachment, strength, resistance, friction, contact
Financial Leverage
The ability to increase shareholder return by earning more from ASSETS than is paid in INTEREST on LIABILITIES incurred to fund assets.
