Difference between revisions of "Leverage"
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| − | [[Leverage]] | + | [[Leverage]] is the use of borrowed money to supplement existing funds for purposes of investment. |
==Definition== | ==Definition== | ||
According to [[Macroeconomics by Mankiw (7th edition)]], | According to [[Macroeconomics by Mankiw (7th edition)]], | ||
:[[Leverage]]. The use of borrowed money to supplement existing funds for purposes of investment. | :[[Leverage]]. The use of borrowed money to supplement existing funds for purposes of investment. | ||
| + | According to [[Managerial Accounting by Braun, Tietz (5th edition)]], | ||
| + | :[[Leverage]]. Earning more income on borrowed money than the related interest expense, thereby mcreasing the earnings for the owners of the business; also called trading on equity. | ||
| + | According to the [[HRBoK Guide]], | ||
| + | :[[Leverage]]. The ability to multiply the return on an investment. The act of applying a small investment to bring a high level of return. | ||
| − | [[Category: Economics]][[Category: Articles]] | + | [[Category: Economics]][[Category: Articles]][[Category: Accounting]][[Category: Management]] |
Latest revision as of 20:21, 20 July 2020
Leverage is the use of borrowed money to supplement existing funds for purposes of investment.
Definition
According to Macroeconomics by Mankiw (7th edition),
- Leverage. The use of borrowed money to supplement existing funds for purposes of investment.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Leverage. Earning more income on borrowed money than the related interest expense, thereby mcreasing the earnings for the owners of the business; also called trading on equity.
According to the HRBoK Guide,
- Leverage. The ability to multiply the return on an investment. The act of applying a small investment to bring a high level of return.
