InvestorWords.com
financial leverage
Definition
The degree to which an investor or business is utilizing borrowed money. Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt; they may also be unable to find new lenders in the future. Financial leverage is not always bad, however; it can increase the shareholders' return on investment and often there are tax advantages associated with borrowing. also called leverage.
Recommended Articles from InvestorGuide.com
Related Videos
Featured Advertiser
Get our free Term of the Day newsletter!
Nearby Terms
- Financial Institutions and Prudential Policy Unit (FIPP)
- Financial Institutions Reform, Recovery, And Enforcement Act Of 1989 (FIRREA)
- Financial Institutions Regulatory Act
- financial instrument
- financial intermediary
- financial leverage
- financial literacy
- financial management
- financial management rate of return (FMRR)
- financial market
- financial needs approach



