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).
In physics, leverage denotes the use of a lever and a small amount of force to lift a heavy object. Likewise in business, leverage refers to the use of a relatively small investment or a small amount of debt to achieve greater profits.That is, leverage is the use of assets and liabilities to boost profits while balancing the risks involved. There are two types of leverage, operating and financial.perating leverage refers to the use of fixed costs in a company's earnings stream to magnify operating profits. Financial leverage, on the other hand, results from the use of debt and preferred stock to increase stockholder earnings.