Leverage ( finance)


Good morning all i sugarville and i am her discussing about a topic leveraged finance it is basically belongs to finance so what is leverage we will try to understand it in bullets first thing is in finance leverage sometimes referred to as gearing in the united kingdom and australia so it is another name that is given to this particular word leverage in united

Kingdom and australia this called gearing is any technique involving the use of borrowed funds in this in leverage we borrow funds in the purchase of an asset with the expectation that the after-tax income from the asset and asset price appreciation will exceed the borrowing cost basically in leverage what happens is we will we try to purchase so we try to purchase

A particular asset by borrowing that okay by borrowing money from somewhere and by thinking that we will earn on that asset more than we you know pay off the interest basically so here could mock maracana key up we left i starting monkey who is permanently appreciation asset k appreciation or spec money then evil in return pay t k return jew hoga mojodojo guys keep

Borrowing posted so home easily who says citko finance call it a head by taking dead that is called leverage second thing second point is the finance provider would set a limit on how much risk it is prepared to take and will set a limit on how much leverage it will permit so it is all about the philosophy or it is all about the working process of finance provider

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How he works how she works tk key if if he wants to set a higher limit for you know giving dad to opcodes other pessimism i got ticket and will set a limit on how much level it will permit who’s cooper mid-career advocate non leverage whoaaah cooper mid-career according to your paying capacity tk and would require the acquired asset to be provided as collateral

Security for the loan tk he is not foolish if he if he is giving you a loan he will definitely ensure that a loan amount will be paid you know efficiently in that case he will you know provide he he will have something at at his own site first of all so collateral security will be placed in hims a hard side when he will provide you a loan particular tk so a b

Ab she’s taking a third point hair ab third point caqueta third point a cateye for a receive a residential property the finance provider may lend up to say 80% ticket after a presidential purpose 800 ebola data if i swear i will you will provide you almost entire cap entire cost of that asset tk ho jayega as a loan of the property market value for a commercial

Property it may be 70% while spheres it may be 60% so if what is happening here is as the risk increases the loan amount also the money which is provided by the window finance provider tk is getting less so it’s cheese maybe tecna key risk a factor both ballarat there while getting any asset on leverage fourth point they can individual leverage their savings india

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Here we’re talking about the term individual leverage so what is individual leverage in an individual leverage individual saving when buying a home by financing a portion of the purchase price with mortgage dead so i hope you understand this clearly next is abbreviation we will talk about talk about it in expansion later so what to a particular term actually age

So is teach canberra kable full-form staycay the students who belongs to finance field would definitely know it well tk abbott means earning before interest in text it can be seen in any balance sheet of a particular company tk d ul is degree of operating leverage dfl is degree of financial leverage these are the types of leverage that we have taken at present

Dcl degree of combined leverage and return on the qte the return which we get on equity owners capital is called ro e ro a return on asset the return what we get on assets t can i ask business assets are called you do not assets so here we are done with you today’s topic i hope you like my video and if you like my video please subscribe my channel and say

Transcribed from video
Leverage ( finance) By Himanshu Agarwal