Business, Legal & Accounting Glossary
Alternative term for gearing, commonly used in the USA.
The ability to influence a system, or an environment, in a way that multiplies the outcome of one’s efforts without a corresponding increase in the consumption of resources. In other words, leverage is the advantageous condition of having a relatively small amount of cost yield a relatively high level of returns.
The use of debt financing, or property of rising or falling at a proportionally greater amount than comparable investments. For example, an option is said to have high leverage compared to the underlying stock because a given price change in the stock may result in a greater increase or decrease in the value of the option.
financial leverage, operating leverage
Return on equity
Return on assets
Return on invested capital
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This glossary post was last updated: 22nd November, 2021 | 0 Views.