Financial leverage, Financial Management

Assignment Help:

Financial Leverage

In accounting and finance, the amount of long lasting debt that an organization has in relation to its equity the longer the ratio, the larger the leverage. Leverage is generally calculated by a difference of the debt-to-equity ratio, which is calculated as follows:

1764_leverage.png

A company's optimal leverage depends on the stability of its earnings.  A company with consistently high earnings can be more leveraged than an organization with variable earnings, because it will consistently be more likely to make the needs interest and principal payments.


Related Discussions:- Financial leverage

Participants in secondary market, PARTICIPANTS IN THE SECONDARY MARKET ...

PARTICIPANTS IN THE SECONDARY MARKET The players in the secondary capital market include: Individual Investors (Public). Companies. Mutual funds. Financial Insti

Companies accuse investors of performing credit sales, At times, companies ...

At times, companies accuse investors of performing credit sales that they make their quotations fall. Is that true? It is true: there are companies that accuse investors who pe

Manage an assignment, Manage a project or clearly defined piece of work fro...

Manage a project or clearly defined piece of work from beginning to end. This may include setting up a budgetary system.

Cash flows from portfolio of us standard mortgages, The cash flows ...

The cash flows from a portfolio of US standard mortgages have the characteristic of being uncertain. The cash flows from the mortgage consists of three comp

Australian securities and investment commission, Australian Securities and ...

Australian Securities and Investment Commission: The Australian Securities and Investment Commission (ASIC) is an independent government body established by the ASIC Act 1989.

Define how can estimate expected incremental cash flows, How do we estimate...

How do we estimate expected incremental cash flows for a proposed capital budgeting project? We calculate expected incremental cash flows for a planned project by estimating the

Functions of derivatives market, Functions of Derivatives Market: To re...

Functions of Derivatives Market: To reduce risk or eliminate risks some ways and methods are there. Risk in the capital market can be reduced by diversification or putting eggs

Analysis of cash and liquidity, • Graph the Current and Quick Ratios for th...

• Graph the Current and Quick Ratios for the five years. • Analyze observations of the trends you observed. • Support you analysis with information you observe from the Trend and

Dividend policies, explain for factors influencing design for dividend poli...

explain for factors influencing design for dividend policies

Analysing performance through ratios, Analysing performance through ratios ...

Analysing performance through ratios Ratios are an effective way of analysing financial statements. A ratio is 2 figures compared to each other and can either be in absolute te

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd