Talk:Leverage (finance)

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Isn't slippage another word for 'gapping risk' (which is not what is discussed in this article? 210.177.242.221 07:27, 19 August 2005 (UTC)

Contents 1 Moved 2 Removed slippage 3 Means what? 4 More spice to the leverage section 5 More spice to the leverage section 6 Text moved from Leverage

[edit] Moved

Moved from Leverage (business).--Jerryseinfeld 10:33, 9 Jan 2005 (UTC)

[edit] Removed slippage

This seemed to be more of a measurement problem than anything to do with the basics of leverage. It probably belongs in a discussion about continuous and discrete compounding. If it were to be explained more clearly ... Smallbones 05:20, 19 December 2005 (UTC)

I believe that the financial theories encouraging the borrowing of funds instead of using the entities own fund for financing its projects and the working capital is becoming to be invalid. Recently the world economy has suffered from its financial theories which one of them is financila liveraging. Some companies have successfuly managed to finance its operations using its own funds (retained earnings) and adding value to its partners equity without getting the financial institutions sharing their growth with very minimum risk. —Preceding unsigned comment added by Turki MSL (talk • contribs) 13:21, 27 April 2008 (UTC)

[edit] Means what?

I've taken out the statement "The term leveraged finance was originally coined by David N. Deutsch and its term for a firm's capital composition." Mr. D is a living person and "leveraged finance" seems to be a very old term - maybe he put a different spin on it. In any case it would need explanation

[edit] More spice to the leverage section

I'm pl are small in relation to its debt burden.

The debt/equity ratio gives you the math for predicting the resulting returns from leverage. Does your proposed use of EBITDA do that?Retail Investor 19:06, 14 November 2006 (UTC)

The point is, I would like to create a bridge from the debt/equity-view to a today now commonly used view of Debt/EBITDA without smacking what was written before. In a sense, there is justification, because if someone from the business talks "leverage" then it's the debt burden in relation to EBITDA or cash flow. Debt/Equity is only secondary to repayment, which is what a bank utlimately is looking for.

Have you looked at the EBITDA page? Its use by debt holders is only addressed at the very bottom. I think that this is the ONLY proper use of EBITDA (because I come from the accrual accounting POV). If you do the revision suggested, why not try to correct the into there as well and provide a link?Retail Investor 19:06, 14 November 2006 (UTC)

[edit] More spice to the leverage section

I'm plical point "leverage" clearly is associated with debt/equity calculations, why is it used in banks in a more dynamic sense, namely related to repayment capacity of a borrower? A finance vehicle might have a conservative debt/equity ratio but still be leveraged because the cash flows are small in relation to its debt burden.

The debt/equity ratio gives you the math for predicting the resulting returns from leverage. Does your proposed use of EBITDA do that?Retail Investor 19:06, 14 November 2006 (UTC)

The point is, I would like to create a bridge from the debt/equity-view to a today now commonly used view of Debt/EBITDA without smacking what was written before. In a sense, there is justification, because if someone from the business talks "leverage" then it's the debt burden in relation to EBITDA or cash flow. Debt/Equity is only secondary to repayment, which is what a bank utlimately is looking for.

Have you looked at the EBITDA page? Its use by debt holders is only addressed at the very bottom. I think that this is the ONLY proper use of EBITDA (because I come from the accrual accounting POV). If you do the revision suggested, why not try to correct the into there as well and provide a link?Retail Investor 19:06, 14 November 2006 (UTC)

[edit] Text moved from Leverage

Leverage is about mechanical leverage. Below is a stray sentence I cut from that article that may belong here. --Una Smith (talk) 05:03, 22 February 2008 (UTC)

Leverage can also refer, in an economic sense, to the use of debt to acquire assets in a market economy.