What does it mean to be underleveraged?

What does it mean to be underleveraged?

underleveraged in British English (ˌʌndəˈlɛvərɪdʒd) adjective. (of a business organization) having an excessively low ratio of debt capital to equity capital.

Is Underleveraged a word?

Underleveraged is an adjective. The adjective is the word that accompanies the noun to determine or qualify it.

What’s another word for leveraging?

What is another word for leveraging?

using taking advantage of
exploiting manipulating
abusing beguiling
controlling deceiving
defrauding fleecing

What do you mean by leveraging?

1 : to provide (something, such as a corporation) or supplement (something, such as money) with leverage also : to enhance as if by supplying with financial leverage. 2 : to use for gain : exploit shamelessly leverage the system to their advantage— Alexander Wolff.

What is the opposite of highly leveraged?

Even if they wanted to, borrowing more money and using it to expand or grow is not an option. They have leveraged their cash flow or collateral, and there are no more alternatives. Many companies are in the completely opposite situation: they are under-leveraged.

Why is too much debt bad for a company?

Generally, too much debt is a bad thing for companies and shareholders because it inhibits a company’s ability to create a cash surplus. Furthermore, high debt levels may negatively affect common stockholders, who are last in line for claiming payback from a company that becomes insolvent.

What is equity capital in accounting?

Equity capital is funds paid into a business by investors in exchange for common or preferred stock. This represents the core funding of a business, to which debt funding may be added. The price of the shares may appreciate over time, so that investors can sell their shares for a profit.

What is the synonym of harness?

In this page you can discover 60 synonyms, antonyms, idiomatic expressions, and related words for harness, like: control, fit for electric power, tackle, hold in, equip, fetter, enchain, belt, yoke, rein-in and bit.

What is a positive word for leverage?

In this page you can discover 21 synonyms, antonyms, idiomatic expressions, and related words for leverage, like: influence, lift, advantage, support, power, exploit, backing, capability, force, consolidate and weight.

How do you use leverage in Word?

to use (a quality or advantage) to obtain a desired effect or result: She was able to leverage her travel experience and her gift for languages to get a job as a translator. to provide with leverage: The board of directors plans to leverage two failing branches of the company with an influx of cash.

How do you use leverage?

When people take out a loan to purchase an asset or with the hopes of growing their money in the future, they are using leverage. For instance, if you take out a loan to invest in a side business, the investment you pour into your side business helps you earn more money than if you didn’t pursue your venture at all.

Can you be underleveraged?

“Under leveraged” is a term used to describe a situation when an investor has a large amount of equity compared to debt. A risk-averse investor may prefer to be under leveraged, having more equity in the property.

What does underleveraged mean?

Describing a company with too little debt. While it sounds strange, a company may be underleveraged because interest on bonds are usually tax deductible for the issuing company; thus, a bond issue can create higher earnings per share for stockholders. There is no metric for determining when a company is underleveraged…

What is the difference between leveraged and under-levered?

This is because ‘Levered’ and ‘Leveraged’ seem alike, and is often interchanged. Whereas Under leveraged refers to a company with little debt related to its assets. Under-levered has no absolute meaning.

How do you know if a company is underleveraged?

There is no metric for determining when a company is underleveraged and investors decide on it based on their personal perceptions. Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved Of, relating to, or being a firm that has insufficient debt in its capital structure.

What is another word for leverage?

other words for leverage. MOST RELEVANT. advantage. bargaining chip. clout. weight. ascendancy. authority. break.