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Leverage (finance)

About: Leverage (finance) is a research topic. Over the lifetime, 11860 publications have been published within this topic receiving 321286 citations. The topic is also known as: gearing.


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Proceedings ArticleDOI
Lili Ma1, Ruize Xiong1
30 Aug 2011
TL;DR: Wang et al. as discussed by the authors set the equilibrium price of stock in capital market as a function of subjective discount factor, relative-risk-aversion coefficient, and habitual parameter, and researches the effects of the investor's behavioral parameter's fluctuations on volatility of asset price with the method of numerical simulation.
Abstract: The fluctuations of capital market mainly originate from the volatility of asset price. How to understand and describe the volatility of asset price is meaningful for both the finance theory and the finance application. The attribute of investor's subjective behavior makes marked effect on asset price. This paper sets the equilibrium price of stock in capital market as a function of subjective discount factor, relative-risk-aversion coefficient, and habitual parameter, and researches the effects of the investor's behavioral parameter's fluctuations on volatility of asset price with the method of numerical simulation. The simulation outcome reveals that a little fluctuations of investor's behavioral parameter result in big fluctuations of stock price in China.

1 citations

Posted Content
TL;DR: This article investigated the link between financial structure and employment growth, and found that firms with high leverage also tend to cut inventories 5% more when a shock in demand occurs, indicating that higher financial vulnerability reflected in high leverage may have worsened during that period.
Abstract: This paper investigates the link between financial structure and employment growth, and the link between financial structure and inventory growth, among incorporated Canadian manufacturers from 1988 to 1997. It finds that financially vulnerable firms - smaller firms and those with higher leverage - shed nearly 10% more labour than financially healthier firms for a given drop in product demand. The influence was larger during the recession of 1990 to 1992 indicating that higher financial vulnerability, reflected in high leverage, may have worsened during that period. The influence was also greater in sectors that experienced larger cyclical fluctuations. On average, firms with high leverage also tend to cut inventories 5% more when a shock in demand occurs.

1 citations

01 Jan 2008
TL;DR: In this paper, the authors investigated whether financial obstacles, and more generally financial pressure faced by firms, significantly affect firm growth and found that, though based on few variables, this measure appears to be relevant in explaining firm growth in four out of the five countries considered.
Abstract: This paper investigates whether financial obstacles, and, more generally, financial pressure faced by firms, significantly affect firm growth. For this purpose, we use an unbalanced panel of about 1,000,000 observations for around 155,000 non-financial corporations in five euro area countries. In addition to the balance sheet information in this panel, we also rely on firm level survey data. In this way we are able to work out a direct measure of the firms� probability of facing financing obstacles. Our results indicate that, though based on few variables, this measure appears to be relevant in explaining firm growth in four out of the five countries considered. Other firm-level variables related to the financial pressure faced by firms, such as cash flow (debt burden) are found to exert a positive (negative) impact on firm growth, while the results for leverage are less clear-cut.

1 citations

01 Jan 2008
TL;DR: In this paper, the authors present findings of a pilot study, which evaluates financial ratios in the Indonesian construction firms, based on annual reports taken from all of construction companies listed in Surabaya Stock Exchange (SSX) Indonesia.
Abstract: This paper presents findings of a pilot study, which evaluates financial ratios in the Indonesian construction firms. The study is an extension of a larger study that is an attempt to explore strategic practices for Indonesian construction firms that generates a competitive advantage. The findings are based on annual reports taken from all of construction companies listed in Surabaya Stock Exchange (SSX) Indonesia. The SSX has classified 6 firms in the construction sector. The research methodology adopted for this study includes data collection and analysis of firm annual reports and financial statements. There are some methods and techniques of financial ratio analysis in analyzing corporate performance of construction firms. Modified traditional ratios such as Liquidity, Leverage, Activity and Profitability ratios are adapted from Construction Financial Management Association (CFMA) to support different purposes of analysis. When analyzing ratios, the results are compared with other firms in the same fiscal periods from 2003 to 2007. The analysis reveals that the Indonesian firms in this study are financially sound, where profits and returns generated from construction works are still satisfactory. However, this performance can still be sustained if they are able to manage their maximum pace at which a company can grow revenue without depleting its financial resources.

1 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
20224
2021552
2020869
2019866
2018767
2017886