Deleverage
 |
Definition of 'Deleverage'A company's attempt to decrease its financial leverage. The best way for a company to delever is to immediately pay off any existing debt on its balance sheet. If it is unable to do this, the company will be in significant risk of defaulting. |
 |
Investopedia explains 'Deleverage'Companies will often take on excessive amounts of debt to initiate growth. However, using leverage substantially increases the riskiness of the firm. If leverage does not further growth as planned, the risk can become too much for the company to bear. In these situations, all the firm can do is delever by paying off debt.Any sign of deleverage shown by a company is a red flag to investors who require growth in their companies. |
Related Definitions
Articles Of Interest
-
Trading Is Timing
Learn how to make gains even if you don't get in at the right time. -
Reading The Balance Sheet
Learn about the components of the statement of financial position and how they relate to each other. -
Do stimulus checks work?
In theory, stimulus checks are intended to increase the amount of capital in the economy. By giving back tax dollars in the form of a stimulus check, governments hope that consumers will make ... -
Will Corporate Debt Drag Your Stock Down?
Borrowed funds can mean a leg up for companies, or the boot for investors. Find out how to tell the difference. -
Introduction To Fundamental Analysis
Learn this easy-to-understand technique of analyzing a company's financial statements and reports. -
How Leverage Is Used In Forex Trading
Forex trading by retail investors has grown by leaps and bounds in recent years, thanks to the proliferation of online trading platforms and the availability of cheap credit. The use of leverage ... -
What Is Spread Betting?
The temptation and perils of being over leveraged is a major pitfall of spread betting. However, the low capital outlay necessary, risk management tools available and tax benefits make spread ... -
Leverage: What It Is And How It Works
Leverage is an investment strategy of using borrowed money to generate outsized investment returns. Before getting into greater detail on how leverage works in an investment context, it is useful ... -
The Basics of Forex Leveraging
A closer look at the controversial topic of leverage in forex trading. -
The Basics Of The T-Bill
The U.S. government has two primary methods of raising capital. One is by taxing individuals, businesses, trusts and estates; and the other is by issuing fixed-income securities that are backed ...
Free Annual Reports