Debt leverage

Debt leverage

Amplification of the return earned on equity when an investment or firm is financed partially with borrowed money.
References in periodicals archive ?
Debt leverage and gearing indicators increased during fiscal year 2017-18 on account of higher utilization of long term debt while liquidity indicators and coverages remained modest.
Debt leverage and gearing indicators increased during FY18 on account of higher utilization of long term debt while liquidity indicators and coverages remained modest.
The proposed sale by India's Reliance Industries Ltd (RIL) of a 20 per cent stake in its oil-to-chemicals (O2C) business to Saudi Aramco will reduce RIL's debt leverage, a credit positive, said Moody's Investors Service in a new report.
Summary: Singapore, Aug 14 (ANI): The proposed sale by Reliance Industries Limited (RIL) of a 20 per cent stake in its oil-to-chemicals (O2C) business to Saudi Arabian oil company Aramco will reduce RIL's debt leverage which is a credit positive, Moody's Investors Service said on Wednesday.
Should management intend to maintain elevated cash balances for an extended period, Fitch could place greater emphasis on net debt leverage ratios, in particular if structural features are present that ensure the ongoing availability of cash to benefit creditors.
This transaction will not impact Invesco's intention to resume share buybacks by yearend 2018, when the firm's debt leverage is reduced to the previously announced targets.
Our acquisition targets are EBITDA generating, asset rich companies that are readily financed using a conservative amount of debt leverage. We see this as a key next step in our path to successfully executing several near term acquisition opportunities that should drive our rapid revenue growth in 2018 and beyond."
"Looking ahead, we remain focused on generating sustainable strong free cash flow to continue strengthening our balance sheet through debt reduction and improving our debt leverage ratio which is 2.29x as of the end of the first quarter and well within our long-term targeted range of 2.Ox to 2.5x."
Capital structure of the company witnessed improvement on account of retention of profits translating into decline in debt leverage and gearing indicators.
This is why debt leverage is generally suitable for high-net-worth households with strong balance sheets, though even still UBS cautions such investors leveraging their strong balance sheets through short-term financing -- because of the danger of "ending up on the wrong side of this trade."
Alaska Communications said it will dedicate these proceeds to reduce debt to approximately USD 165m from approximately USD 415m, which will improve the net debt leverage ratio to 3.1x on a pro forma basis from 4.5x.
"Some of TAQA's assets no longer fit into its strategy after the company's growth plans were rebalanced," one of the sources said, adding that the sales would reduce debt leverage and improve cash flow.