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.

Research: CEOs with Diverse Networks Create Higher Firm Value

Harvard Business Review

To estimate the effect of a CEO’s social network’s diversity on their firm’s value, we used ordinary least square regression models to control for other variables that could potentially change firm value, such as firm size, profitability, financial leverage, investment intensity, and corporate governance. Bernhard Lang/Getty Images. Leaders today hear a lot about the importance of having good networks.

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.

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?

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.

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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?

I Got My Strategy from Greenpeace

Harvard Business Review

But there our story deviates from the norm because our turnaround wasn't based on cost control, financial leverage, or manufacturing efficiencies. I'm the CEO of Desso , a European company that makes carpets, carpet tiles and synthetic sports surfaces. I'm also an owner. A group of us bought the company from the Armstrong Group in a buy-out in 2007. We put our money in because we saw an opportunity to turn a struggling company around and secure a high ROI. We did that.