What FINANCIAL LEVERAGING means for development in organizations (Part 2)

in hive-175254 •  2 months ago 

First of all, I would like to give a big greeting to all the friends of steemit and especially to the members of this prestigious community, Colombia-Original. Today I want to share with all of you a publication that is related to what FINANCIAL LEVERAGING represents for the development of organizations, in its second part.

Nowadays, organizations that aspire to take a step forward in growth, in most cases due to the world economic recession, must look for different financial alternatives and among these sources of financing we can find leverage, which serves to obtain resources to make the necessary investments within the organizations, among which we can find internal or external, but the second is undoubtedly the most common, which generates a commitment acquired with the financial entities, as well as disbursements for interest payments.

It should be mentioned that when resorting to a credit, the company's equity is compromised, hence, financial leverage represents that the company acquires debts and in many cases significant debts to use them in the development of the established plans and strategies.

Therefore, if it is not measured and evaluated in the right way, it can be transformed into major difficulties for the company, hence the need to know the financial leverage with its guidelines, payment dates and liquidity that can generate the companies.

In this way and in counterpart it is very important that the management of the companies can formulate their business investment strategies, so that the company's assets are not too compromised and can also make investments in other sources of income generation, beyond the real possibilities of payment of the organization.

That is why business investment strategies are aimed at planning them for a term that allows the company to grow in the medium and long term; therefore, financial leverage plays a decisive role in this regard.

To conclude we can mention that one of the biggest problems occurs when this type of tools is not taken into account and credits are obtained without looking at the consequences, therefore, the cases must be well studied to determine what type of investment the company will make.

Bibliographical Reference:

Boscán and Guerrero (2016) Financial leverage as a strategy for increasing the equity of small and medium-sized enterprises.

All photos are in the public domain from Pixabay.
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hello @dgalan,
Companies that resort to financial leverage to expand run the serious risk of failure and will be left in debt, which is why before resorting to financial leverage it is important to bear in mind that this tool can accelerate the growth of a company or, on the contrary, can quickly lead it to ruin.

Hello @trabajosdelsiglo
It is very true your appreciation that companies must know the risk that coreen to make a placation, but it is also true that there are many positive experiences when they take seriously this type of financing that allows them to consolidate and develop over time.
Thank you very much for commenting

Hello @dgalan

Excellent topic that you have chosen to share with all of us, without a doubt, financial leverage plays a decisive role in the growth of any company.

Kind regards, be well.

Hi @lupafilotaxia _
There is no doubt that financial leverage allows companies to realize their growth and operation projects and is a determining factor for the development of the company.
Thank you very much for commenting

I must that Leverage is a great tool that big companies don't joke with and the reason is quite simple . Financial leverage helps an organization commit more to a project while also avoiding the payment of higher taxes. It also creates room for the organization to do more with the spare cash in the bank/hand. But as you said, the organization has to do a careful analysis of their organization structure, debt, and project before obtaining more financial leverage.

Hi @lebey1
Your comment is very true and I share it, those companies that do not take financial leverage seriously are destined to fail by their own means.
Thank you very much for commenting