Leverage and Public Company Accounting Oversight Board: Difference between pages

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1.
(PCAOB). ''US.'' A non profit corporation established under the terms of the Sarbanes-Oxley Act to oversee the audits of public companies and broker-dealers.
 
Debt divided by Debt plus Equity = D / ( D + E ).
 
 
'''Example'''
 
If the amounts of debt and equity were equal, then leverage under this definition would be calculated as:
 
1 / ( 1 + 1 ) = 50%.
 
 
2.
 
Gearing.
 
Leverage is based on the same inputs, but the calculation would be:
 
1 / 1 = 100%.
 
 
3.
 
To increase the level of gearing in an operational or financial structure. 
 
The intention of leveraging is to improve expected net results. 
 
The consequence of leveraging is normally to increase financial risk.
 
Many financial disasters have been a consequence of leveraging up excessively in this way in earlier periods.
 


== See also ==
== See also ==
* [[Debt]]
* [[Auditing Practices Board]]
* [[Deleverage]]
* [[Sarbanes-Oxley]]
* [[Gearing]]
 
 
==Other links==
[http://www.treasurers.org/node/8012 Masterclass: Measuring financial risk, The Treasurer, July 2012]


[[Category:Corporate_finance]]

Revision as of 14:20, 23 October 2012

(PCAOB). US. A non profit corporation established under the terms of the Sarbanes-Oxley Act to oversee the audits of public companies and broker-dealers.

See also


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