Understanding Financial Leverage

Harvard Business Review

"Leverage" is one of the more interesting and difficult concepts to fully grasp in all of finance, but it's important for anyone that borrows or plans to borrow money to understand. Combining the two suggests that the party which borrows has the leverage — they have the power and advantage over others. Yet many people jump into risky financial situations without considering the potential consequences. The second is that the asset underlying the leverage holds its value.

Private Equity’s New Phase

Harvard Business Review

This phase was loosely called leverage buy out (LBO) from about 1979 to 1990 and included over 2,000 LBOs. The primary focus was on fixing the acquired firm through financial restructuring, dramatic cost cutting, and strategic slashing.

LBO 11

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How To Really Measure a Company's Innovation Prowess

Harvard Business Review

Financial leverage (assets over equity). With Dupont in mind, we can come up with a better measurement by sub-dividing ROII as follows: Innovation magnitude (financial contribution divided by successful ideas). Who is the world's most innovative company?

How To Really Measure a Company's Innovation Prowess

Harvard Business Review

Financial leverage (assets over equity). With Dupont in mind, we can come up with a better measurement by sub-dividing ROII as follows: Innovation magnitude (financial contribution divided by successful ideas). Who is the world's most innovative company?

The Type of Socially Responsible Investments That Make Firms More Profitable

Harvard Business Review

For investors, this suggests that there is substantial value from analyzing non-financial data and incorporating it into their decisions. Less so for financial institutions or healthcare companies.