--%>
Assignment Help - homework help

Explain the term leverages

Briefly explain the term leverages?

E

Expert

Verified

Leverage is a common word that is employed in financial management and it is employed as a method to multiply the losses and gains. It refers of achievement of more profit on comparative lower level of investment or lesser sales. There are various ways to accomplish leverage the most general of them all is buying the fixed assets, borrowing money and employ of derivatives. Examples of these are illustrated below:-

i) Public corporation might leverage its equity through borrowing money. The more a company borrows less equity capital it wants so the losses and profits are shared between small groups of people.

ii) Business Corporation might leverage its revenue through buying fixed assets. This will get more fixed proportion to the company instead of variable cost as change in revenue will effect in larger change in operating income.

   Related Questions in Business Economics

  • Q : Price competition My friend can't

    My friend can't succeed to get the answer of this question. Give me solution of this question. From a heterodox perspective, why does destructive price competition drive enterprises to set up market institutions which would abolish price competition?

    		•
  • Q : Gains from the Exchange Even people who

    Even people who are extremely good at everything couldn’t encompass: (i) absolute benefits in approximately everything. (ii) Much higher incomes than average. (iii) Comparative benefits in everything. (iv) Superior natural endowments of talent.

    Q : Wealth of Nations academic

    By the perspective of nowadays academic standards, Adam Smith must have more evidently acknowledged that several the analyses and insights for that he took credit within his Wealth of Nations had really been gleaned from the writings

    		•
  • Q : Market Apparent program For the

    For the question below, utilize the given information. The market for gizmos is competitive, with an increasing sloping supply curve and a downward sloping demand curve. With no govt. intervention, the equilibrium price is $25 and the equilibrium quantity is 10,000 gi

    		•
  • Q : Utility with food coupons Question: In

    Question: In Vancouver the Salvation Army encourages people to make food voucher donations to panhandlers instead of simply giving them cash. You can buy a food voucher for $5 and give it to a panhandler who can use it to purchase food. The Sa

    		•
  • Q : Explain the cause of Trade barriers

    Explain the cause of Trade barriers?

    		•
  • Q : Problem regarding to taxes and market

    The new supply and demand curves within University City are S0 and D0. But after the county commission imposed a $3 per six-pack excise tax upon beer, monthly sales of six-packs: (w) fell to 10,000, and buyers paid $6.50 each, bu

    		•
  • Q : Cornerstone of typical economic theory

    The cornerstone of typical economic theory derived through the work of Jeremy Bentham was the perception of (i) the wages fund. (ii) natural checks on population. (iii) increasing cost. (iv) utility. (v) surplus value.

    Q : Help How is a shift in demand reflected

    How is a shift in demand reflected in a demand equation? How is a shift in supply reflected in a supply equation? How is a movement along a demand (supply) curve reflected in a demand (supply) equation?

    		•
  • Q : The Federal corporate income tax Use

    Use the circular flow model to confirm this assertion for a 2% reduction in the Federal corporate income tax.

    		•