--%>
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 : Production possibility frontier

    Question: Scenario: You have been hired as the economics adviser for the newly elected State Premier. On your first day, the Premier introduces you to the new Minister for Health

    		•
  • Q : Elucidate Ticket Scalping - A Bum Rap

    Elucidate “Ticket Scalping:  A Bum Rap”?

    		•
  • Q : Problem on productive contribution

    Suppositions underpinning simple production possibilities frontier models don’t comprise a need that: (i) Net resources are fixed. (ii) All resources are efficiently employed. (iii) Technology is steady. (iv) Resource owners are paid according t

    		•
  • Q : Illustrates inverse relationship

    Illustrates the inverse relationship between price and quantity?

    		•
  • Q : Cchange in demand and a change in the

    Distinguish between a change in demand and a change in the quantity demanded?

    		•
  • Q : Public Sector Government Role

    Illustrate the Public Sector Government’s Role of providing the legal structure?

    		•
  • Q : Argument by Adam Smith for a true

    Within the Wealth of Nations, argument by Adam Smith such that a nation’s true wealth is its capability to: (1) obtain stocks of financial capital. (2) inspire its people’s courage and diligence. (c) give

    		•
  • Q : What happens in the resource markets

    What happens in the resource markets?

    		•
  • Q : Explain how an increase in state

    Use two market diagrams to explain how an increase in state subsidies to public colleges might affect tuition and enrollments in both public and private colleges.

    		•
  • Q : Distribution of endowments 1. We have

    1. We have discussed the importance of resource endowments and institutions for an economy's successful development. a. In this game, what are the resources that make up the endowments, and what defines a given player's endowment o

    		•