Bridge and Leverage: Difference between pages

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1. ''Finance - facilities.''
1. <br />
Debt divided by Debt plus Equity = D / (D + E).<br />
<br />
<b>Example</b><br />
If the amounts of debt and equity were equal then leverage under this definition would be calculated as:<br />
1 / (1 + 1) = 50%.<br />
<br />
2. <br />
The term 'leverage' is also used in a broader sense to refer to the amount of debt in a firm's financial structure.<br />
Used in this broader sense, 'leverage' means very much the same as 'gearing'. <br />
However, leverage and gearing are normally quantified by different calculations.<br />
<br />
3. <br />
To increase the level of gearing in an operational or financial structure.  The intention of leveraging is to improve expected net results.  <br />
A consequence of leveraging is normally to increase financial risk.<br />
Many financial disasters have been a consequence of leveraging up excessively in this way in earlier periods.
<br />


Abbreviation for ''bridge financing'' or ''bridge facility''.


A bridge is a loan or facility that is expected to be used on an interim basis only.
== See also ==
* [[Debt]]
* [[Deleverage]]
* [[Gearing]]
* [[Leverage ratio]]




:<span style="color:#4B0082">'''''Successful demerger - GSK/Haleon'''''</span>
===Other links===
[http://www.treasurers.org/node/8012 Masterclass: Measuring financial risk, The Treasurer, July 2012]


:"The separation and demerger of Haleon from GSK was a multi-faceted transaction that demanded deep involvement from both treasury teams, on both a strategic and operational level...
:The many tasks the teams had to achieve, to a strict timetable, included... setting up term loans ($1.5bn) and a bridge to DCM for Haleon ($10bn)."
:''The Treasurer online, 4 April 2023 - ACT Deals of the Year 2022: Large team of the year.''
2.  ''Cooperation - communication.''
A forum or facility to enable communication and collaboration.
For example, the Association for Financial Markets in Europe (AFME) aims to act as a bridge between market participants and policy makers.
3.  ''Verb.''
To create such a forum, facility or measure designed to enable communication and collaboration.
For example, the Return on Sustainability Investment measure is designed to bridge the gap between sustainability strategies and financial performance.
==See also==
*[[Association for Financial Markets in Europe]]  (AFME)
*[[Bridge Bank]]
*[[Bridge currency]]
*[[Bridge facility]]
*[[Bridge financing]]
*[[Bridge to bond]]
*[[Debt capital market]]  (DCM)
*[[Demerger]]
*[[Return on Sustainability Investment]]  (ROSI)
*[[Term loan]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]

Revision as of 12:12, 29 May 2015

1.
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.
The term 'leverage' is also used in a broader sense to refer to the amount of debt in a firm's financial structure.
Used in this broader sense, 'leverage' means very much the same as 'gearing'.
However, leverage and gearing are normally quantified by different calculations.

3.
To increase the level of gearing in an operational or financial structure. The intention of leveraging is to improve expected net results.
A 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


Other links

Masterclass: Measuring financial risk, The Treasurer, July 2012

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