Export Options:
Fundamental
Leverage
Use of borrowed money to amplify returns and risk
Definition
Financial leverage uses debt to increase potential returns. While it can amplify gains, it also increases risk of losses. Operating leverage refers to fixed costs amplifying operating income changes.
Related Topics
#debt
#return amplification
#risk increase
#capital structure
Quick Actions
Related Terms
Category: Fundamental
Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.
View all Fundamental terms →