T
The Funky Gibbon
Member
I was looking at some of the core reading in chapter 19. I was confused by a list of terms related to financial strength (questions below).
Operating leverage
Financial leverage
Asset leverage
Capital structure
Liquidity
How does Capital Structure differ from Financial leverage- don't they both describe the debt and equity proportions? I understand the effect of high gearing on risk to shareholders.
Asset leverage- does this basically mean that if you hold assets that have high value with low volatility of value you will be a lower credit risk and you could be described as having high asset leverage?
Operating leverage
Financial leverage
Asset leverage
Capital structure
Liquidity
How does Capital Structure differ from Financial leverage- don't they both describe the debt and equity proportions? I understand the effect of high gearing on risk to shareholders.
Asset leverage- does this basically mean that if you hold assets that have high value with low volatility of value you will be a lower credit risk and you could be described as having high asset leverage?