leverage

leverage is that portion of the fixed costs which represents a risk to the firm. leverage is an investment strategy of using borrowed money – specifically, the use of various financial instruments or borrowed capital to increase the potential return of an investment. leverage can also refer to the amount of debt a firm uses to finance assets. leverage is the technique which is used to evaluate risk associated with any business organization. the term leverage in general refers to a relationship between two interrelated variables. in financial analysis it re[resents the inf luence of one financial variable over some other related financial variable. these financial variables may be costs, output, sales revenue, earnings before interest and tax (ebit), earning …

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