Leverage:
It is a very scientific tool in the hand of finance manager. Finance manager employs this tool for making efficient financial structure of company. Financial structure is merely mix of debt and equity and with help of leverage, finance manager acquires fund with effective ratio of equity and debt.
In easy word leverage is power and relationship among two interrelated variables. Such variables might be output, sale, cost and gain. Finance manager computes such leverage by apply formula and then utilizes them for taking decision in favor of company's shareholder. Main purpose of leverage testing is maximize the earning of shareholder and reduces the risk of company.
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In financial accounting, a bank reconciliation statement is ready to reconcile among the bank balance as depicted through the pass- book and cash- book of a business organization.
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