1. Meaning of Leverage Leverage is used to describe the firm's ability to use fixed cost assets or funds to magnify the return to its owners. James van Home has defined leverage, as "the employment of an asset or funds for which the firm pays a fixed cost or fixed return." In other words, Leverage is the employment of fixed [...]
Leverage is defined basically as the firm's utilization of an asset or liability which requires a fixed payment. It is said that leverage is a double-edged sword. The types of leverages are:- 1. Operating Leverage 2. Financial Leverage 3. Combined Leverage. Additionally, learn about the formulas, degree, applications, illustrations and solutions for each type of leverage. Types of Leverages: Operating, [...]