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متابعة

When is financial leverage considered favorable?

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تم إضافة السؤال من قبل Sanjish Aryal , Senior-Audit and Accounts , Baker Tilly, Dev Associates
تاريخ النشر: 2016/10/16
Zargham Haider
من قبل Zargham Haider , Joint Director , Securities and Exchange Commission of Pakistan

Financial leverage is favorable when the uses to which debt can be put generate returns greater than the interest expense associated with the debt.

MOHAMED ELREWINY
من قبل MOHAMED ELREWINY , Financial Accounting Manager , SAUDI MADAD GROUP

The financial leverage formula is measured as the ratio of total debt to total assets. As the proportion of debt to assets increases, so too does the amount of financial leverage. Financial leverage is favorable when the uses to which debt can be put generate returns greater than the interest expense associated with the debt. Many companies use financial leverage rather than acquiring more equity capital, which could reduce the earnings per share of existing shareholders.

هل تحتاج لمساعدة في كتابة سيرة ذاتية تحتوي على الكلمات الدلالية التي يبحث عنها أصحاب العمل؟