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.

October 2020 Leadership Development Carnival

Lead Change Blog

A seemingly small change in any one of these can threaten your viability and weaken your financial leverage. Welcome to the October 2020 Leadership Development Carnival! We’re excited to share posts from leadership experts from around the globe on the topics of communication, development, engagement, motivation, productivity, team building, and more. Communication. Diana Peterson-More shared Covid Communication: Spread a Little Kindness. With Words.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Three Reasons Leaders Should Ask for Help

Next Level Blog

There’s a ton of leverage that comes with a designated leadership position. Just like financial leverage, leadership leverage can yield amazing outcomes when used well or disastrous outcomes when used poorly. There’s a hero myth that can build up around leaders. The great leaders stand alone, indomitable in the face of adversity, accomplishing their goals in the face of all obstacles. The last thing they need is help from anyone else.

Research: CEOs with Diverse Networks Create Higher Firm Value

Harvard Business

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.

Private Equity’s New Phase

Harvard Business

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. Traditionally, PE firms bring financial discipline and strategic clarity to firms they acquire. A silent, seismic shift has dramatically altered corporate ownership and business governance globally.

LBO 31

Stop Focusing on Profitability and Go for Growth

Harvard Business

The global financial crisis prompted many companies to pull in their horns, hoard cash, trim costs, and take a wary view of large investments. Our models suggest that by 2025 global financial capital could easily surpass a quadrillion dollars, more than 10 times global GDP. And the average long-term ROE is more than 25%, reflecting improved efficiency combined with greater reliance on financial leverage at most companies.

ROE 45

How To Really Measure a Company's Innovation Prowess

Harvard Business Review

Since the primary purpose of innovation for private companies is financial impact, " Return on Innovation Investment (ROII) is a reasonable, aggregate measuring stick for innovation — you can calculate ROII by taking the profits or cash flows produced by innovation and dividing that figure by the cumulative investment required to create those returns. Financial leverage (assets over equity). 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.

How To Really Measure a Company's Innovation Prowess

Harvard Business Review

Since the primary purpose of innovation for private companies is financial impact, " Return on Innovation Investment (ROII) is a reasonable, aggregate measuring stick for innovation — you can calculate ROII by taking the profits or cash flows produced by innovation and dividing that figure by the cumulative investment required to create those returns. Financial leverage (assets over equity). Who is the world's most innovative company?