The Common Stock Ratio is a financial metric that represents the percentage of a company's total capitalization that is comprised of common stock. This ratio is significant as it reflects the degree of financial leverage and stability of the company from both creditor and investor perspectives.
Deleveraging is the process by which an entity reduces its level of debt by rapidly selling off assets or paying down loans, often in response to financial stress or in pursuit of a stronger balance sheet.
A financial metric that shows the ratio of a company's equity to its debt, providing insights into how a company finances its operations and growth.
Financial leverage refers to the use of debt in a firm's capital structure to amplify the returns on equity. It is an essential concept in corporate finance that can significantly impact a company's earnings and risk profile.
Highly leveraged situations in business or investments involve financing to a large degree using borrowed money, which raises the stakes in terms of financial risk and the potential for both gains and losses.
Income gearing refers to the relationship between a company’s operating income and its financial obligations, particularly interest expenses on incurred debt. Essentially, it measures the extent to which a company's activities are funded by borrowed money.
Operating Leverage is a financial concept that measures the proportion of fixed costs in a company's cost structure and how these fixed costs amplify the effect of changes in sales on operating income.
Pyramiding refers to various financial and business strategies, both legitimate and fraudulent, that involve the use of financial leverage, excess distribution chains, or dealership networks designed for growth rather than product utility.
