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imported>Doug Williamson |
imported>Doug Williamson |
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| | A special tax levied on individuals’ incomes above a certain level, in addition to their normal tax liabilities. |
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| Debt divided by Debt plus Equity = D / ( D + E ).
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| '''Example'''
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| If the amounts of debt and equity were equal, then leverage under this definition would be calculated as:
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| 1 / ( 1 + 1 ) = 50%.
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| Gearing.
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| Leverage is based on the same inputs, but the calculation would be:
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| 1 / 1 = 100%.
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| 3.
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| To increase the level of gearing in an operational or financial structure. <br />
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| The intention of leveraging is to improve expected net results. <br />
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| The consequence of leveraging is normally to increase financial risk.<br />
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| Many financial disasters have been a consequence of leveraging up excessively in this way in earlier periods.
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| == See also == | | == See also == |
| * [[Debt]] | | * [[Tax ]] |
| * [[Deleverage]] | | * [[Windfall tax]] |
| * [[Gearing]]
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| * [[Leverage ratio]]
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| ===Other links===
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| [http://www.treasurers.org/node/8012 Masterclass: Measuring financial risk, The Treasurer, July 2012]
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| [[Category:Corporate_finance]] | | [[Category:Accounting,_tax_and_regulation]] |
Latest revision as of 09:30, 8 October 2013
A special tax levied on individuals’ incomes above a certain level, in addition to their normal tax liabilities.
See also
