Overleveraged

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Dictionary Says

Definition of 'Overleveraged'

Occurs when a business is carrying too much debt, and is unable to pay interest payments from loans. Overleveraged companies are unable to pay their expenses because of over excessive costs. This is the formula for financial leverage.

\mathrm{Financial\;leverage} = \frac{\mathrm{Operating\;Income}}{\mathrm{Net\;Income}}
Investopedia Says

Investopedia explains 'Overleveraged'

Occurs when a business has borrowed too much debt, and is unable to pay interest payments on the debts. Companies that borrow too much and are overleveraged are at the risk of becoming bankrupt if their business does poorly. A company not overly leveraged is better able to sustain drops in their business profits. Businesses that borrow money to add to a product line, expand internationally or upgrade their facilities are often better able to offset the risk they take on when leveraging.
Search results for

'Overleveraged'

  • Debt Reckoning

    http://www.investopedia.com/articles/fundamental/03/042303.asp
    ... An example of this was seen during the financial crisis of 2008/09, whereby many
    financial institutions overleveraged themselves with debt, and as assets fell ...

  • Is The Stock Market Rigged?

    http://www.investopedia.com/articles/stocks/10/stock-market-rigged.asp
    ... Wall Street. We became familiar with terms such as overleveraged, mortgage
    backed securities, recession and liquidity crisis. We ...

  • Cities Where Home Prices Continue To Fall - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0710/Cities-Where-Home-Prices-Continue-To-Fall.aspx
    ... on a broader national and even global recovery and a clear turnaround is not yet
    in sight." He also says that the high number of overleveraged homebuyers in ...

  • The Italian Crisis - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0811/The-Italian-Crisis.aspx
    ... Although many disagree with the recent US debt downgrade by Standard and Poor's,
    it cannot be denied that the United States is dangerously overleveraged. ...

  • Buy Into Long-Term Care

    http://stocks.investopedia.com/stock-analysis/2010/Buy-Into-Long-Term-Care-NHC-SUNHD-SBRA-KND-SKH-BKD1228.aspx
    ... turnaround story. Back in 1997 the company was overleveraged and filed for
    bankruptcy, but has since had new leadership and focus. It ...

  • The Island Approach To Credit Card Use

    http://www.investopedia.com/articles/pf/11/island-approach-credit-cards.asp
    ... If you use one card exclusively to make everyday purchases, however, a balance at
    the end of the month is a clear indicator that you are overleveraged and need ...

  • Ivar Kreuger: Businessman Or Scam Artist?

    http://www.investopedia.com/articles/financialcareers/09/ivar-kreuger.asp
    ... scheme where he needed to keep paying out money to get more money in - but Kreuger
    had an actual business beneath it all, overvalued and overleveraged as it was ...

  • Parents And Spinoffs: When To Buy And When To Sell

    http://www.investopedia.com/articles/stocks/09/parents-and-spinoffs.asp
    ... For example, a spinoff could end up overleveraged because the parent may be doing
    a leveraged recapitalization, whereby the spinoff is loaded up with debt and ...

  • Flipping Houses: Is It Better Than Buy and Hold?

    http://www.investopedia.com/articles/mortgages-real-estate/08/flipping-flip-properties.asp
    ... properties do so by identifying homeowners who can no longer manage or sustain their
    properties or by finding properties that are overleveraged and are at risk ...

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