Definition
The use of borrowed capital (debt) to increase the potential return on equity. While leverage can amplify gains, it also amplifies losses and increases financial risk.
Accounting Glossary
The use of borrowed capital (debt) to increase the potential return on equity. While leverage can amplify gains, it also amplifies losses and increases financial risk.
Practice this on iLove-Accounting
Practice it in Financial Analysis: Ratio Analysis, with fresh AI-graded exercises and specific feedback.