Financial Leverage

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Buyout Fund

A private equity fund which focuses on making investments by acquiring a company or a unit with the use of…

FL

It stands for floating rate tranche; a CMO tranche (or a tranche in a similar structure) in which the monthly...

Leverage Buyout Fund

A private equity fund which focuses on making investments by acquiring a company or a unit with the use of...

OBSF

It stands for off-balance sheet financing; a form of leverage that an entity can attain from an off-balance sheet item...

Capitalization Ratio

A financial ratio that relates total debt to total capitalization (capital structure). It tells about how much the company is...

A technique that involves the use of borrowed funds (debt) wholly (100% debt) or partially (a mix of debt and...

Recourse Leverage

The leverage in which the so-called recourse borrowing is used. It is backed by collateral posted by the borrower. The...

Negative Financial Leverage

A financial leverage that negatively impacts return on equity (ROE). A firm with any amount of debt is said to...

Net Financial Leverage

The financial leverage in which debt is related to net equity as shown in the following formula: This tool is...

Hidden Leverage

A form of leverage that an entity can attain from an off-balance sheet item (asset, liability, financing activity, etc.) By...