Actually, financial leverage means using debt to boost returns, and trading on equity is just the fancy term for it. Yaar, the formula is easy: if your company has 10 lakh equity and takes 5 lakh debt at 12%, and EBIT is 2 lakh, then EPS is (2,00,000 - 60,000) / 10,00,000 = ₹1.40.
But I’ve been staring at this textbook while calculating how much debt my family’s small farm took for a new pump... and the interest eats more than the erratic monsoon provides.
So all this leverage theory feels like a rich man's game – in my life, debt isn’t for boosting returns, it’s just survival, and the ‘equity’ we trade is my mother’s quiet worry over her knee pain.
#money#career
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