The use of various financial instruments or borrowed capital, to increase the potential return of an investment, or the amount of debt used to finance a firm's assets.
 | | | Leverage | | Leverage is the investment strategy of using borrowed money: specifically, the use of various financial instruments or borrowed capital to increase the potential return of an investment. Leverage can also refer to the amount of debt used to finance assets. When one refers to something (a company, a property or an investment) as "highly leveraged," it means that item has more debt than equity. | | | Breaking it Down: | | At automobile dealerships, a significant number of car shoppers leave the lot with a brand new car, even though... Read More | | | | | | | | | Equity Multiplier | | The ratio of a company's total assets to its stockholder's equity. The equity multiplier is a measurement of a company's financial leverage. Read More | | | | Trading Margin Excess | | The funds that remain in a margin trading account that are available to use towards the purchase of a new position or the increase of an existing position. Read More | | | | | | | Deleverage | | A company's attempt to decrease its financial leverage. The best way for a company to delever is to immediately pay off any existing debt on its balance sheet. Read More | | | | | | | | | | Follow Us: |  |  | | | | | | |
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