On Financial Leverage

Abstract

Financial leverage is a tool by which an enterprise can adjust the revenue of owner's capital with the handling of debits.Reasonable operation of the financial leverage will bring extra revenue,the benefit on financial leverage to the owner's capital.Financial leverage is affected by many factors.We can get benefit on financial leverage,but at the same time we have to run much unpredictable financial risk.So,it is the basic premise of reasonably operating the financial leverage to carefully study the financial leverage and analyze all the factors affecting the financial leverage and make clear its function,nature and its influence to the revenue of owner's capital.