Leverage Ratio Explained: The Investor's Complete Guide to Financial Risk in 2026
- Jun 16
- 1 min read
Leverage refers to the practice of using borrowed funds to increase your potential returns. A company that has a large amount of outstanding debt is generally referred to as being "leveraged," which means that when a company performs well, it will have amplified positive effects on its profitability, but when it does not perform well, it will suffer from amplified negative effects.
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