On the "leverage" in the enterprise application
---- Financial leverage of
Abstract
Capital structure is an important corporate financial decision-making problem, set a reasonable level of financial leverage with the company's performance is crucial. Financial leverage is the debt capital structure theory, the level set in the company reflected the further practice. After dinner the reform, China has experienced two decades of rapid development, joint-stock reform, maturity, financial markets gradually improve, and how to correct and effective corporate governance, the maximum increase in equity to be on the agenda; how effective use of financial leverage, for the rational allocation of capital structure has become the primary problem in many companies. This paper introduces the definition of financial leverage, financial leverage refers to the relevant principles; and then discuss the root causes of an effect of financial leverage and financial leverage effect analysis, and finally to China's listed company's financial leverage to the specific and detailed analysis. Listed companies in China and put forward their environment should be determined based on a reasonable level of debt, to enhance financial flexibility, the proper use of financial leverage to enhance their ability to resist financial risks.
Keywords: financial leverage leveraged financial risk capital structure
