Written with graceful simplicity, The Big Wave won the Childrenâs Book Award of the Child Study Association of America when it was first released. This ebook features an illustrated biography of Pearl S. Buck including rare images from the authorâs estate. Read on Scribd mobile: iPhone, iPad and Android.
Well, the âadvantageâ of increased financial leverage is a potentially higher return on equity. The disadvantage, on the other hand, is that the business is now riskier as it is financed with more debt (when revenue falls for unexpected reasons, there's now a whole lot of interest that still has to be paid).
Highly leveraged operations accept increased risk in return for potentially higher profits. Related Articles. The use of a lever and fulcrum enables a worker to exert force far in excess of his unassisted strength. In the field of finance, the use of debt or borrowing to increase the size or profitability of a venture is called leverage. While borrowing incurs interest expense and risk, it can also yield rewards.