leveraged company
Leveraged company
Leveraged Company
A company that uses any debt to help finance its operations. Most companies are leveraged to some degree, but others take on so much debt they have difficulty servicing it and may file for bankruptcy. Highly leveraged companies often have more volatile profits than other companies. Some analysts, however, dispute the idea that leverage (or the lack of it) affects a company's performance in any way. See also: Capital Structure, Capital Structure Irrelevance Principle.
leveraged company
A company that uses borrowed money to help finance its assets. Leveraged companies often have more volatile earnings than firms that rely solely on equity financing. This volatility is offset, however, by the possibility of a higher return to stockholders if the firm is able to earn more on its assets than the cost of the money used to finance those assets.