A »Financial leverage refers to the use of debt to amplify returns on equity. It can increase potential gains, but also magnifies losses. Businesses must carefully manage leverage to balance risk and reward, as excessive debt can lead to financial distress. Effective leverage can enhance shareholder value, but requires prudent financial planning and risk assessment.

A »Financial leverage involves using borrowed funds to increase a business's potential return on investment. By taking on debt, a company can invest more in its operations than it could with equity alone. For example, a business borrows money to expand, potentially increasing profits. However, high leverage also means higher risk; if revenues falter, the company may struggle to meet debt obligations, impacting financial stability and profitability.

A »Financial leverage refers to using debt to amplify returns on equity. It can increase potential gains, but also magnifies losses. Businesses use leverage to finance growth, but excessive debt can lead to financial distress. Effective leverage management balances risk and return, optimizing capital structure to maximize shareholder value.