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Financial leverage

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Querist : Anonymous

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Querist : Anonymous (Querist)
06 September 2012 PLEASE TELL ME THAT HOW HIGH FINANCIAL LEVERAGE IS BENEFICIAL TO A COMPANY?
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CA Lokesh Pokharna

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CA Lokesh Pokharna (Expert)
07 September 2012 high financial leverage is beneficial when there is strong demand of products..means co. able to sell 100 % production.
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Querist : Anonymous

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Querist : Anonymous (Querist)
07 September 2012 SORRY SIR I AM NOT ABLE TO UNDERSTAND PLEASE BE MORE SPECIFIC.
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CA Lokesh Pokharna

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CA Lokesh Pokharna (Expert)
07 September 2012 financial leverage means use of debt funds in total capital structure.
total debt / shareholders equity.if your ROCE is more then interest on debt then its beneficial if there is high F.L. ratio.
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Querist : Anonymous

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Querist : Anonymous (Querist)
08 September 2012 thank you.
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