# leverage

Pronunciation: US say "LEV-er-ij" /ˈlɛv(ə)ɹɪd͡ʒ/; UK say "LEE-vuh-rij" /ˈliːv(ə)ɹɪd͡ʒ/

## Noun

1. Influence that is used, or multiplied, to gain an advantage, as in a negotiation or dispute.
   - Simple: Power or influence you can use to get what you want from someone.
   - _With the vote so close, the small party had enormous leverage over the government._
   - _He used the threat of a lawsuit as leverage to get the deal reopened._
2. The multiplied force that a lever produces as it turns on a pivot.
   - Simple: The extra lifting or pushing power you get from a lever turning on a fixed point.
   - _With enough leverage, a single worker could shift the stone using a long iron bar._
   - _Mechanics slip a pipe over the wrench handle to get extra leverage on a stuck bolt._
4. The use of borrowed money, at a cost agreed by contract, to invest more than one could alone and earn a higher expected return, usually at high risk.
   - Simple: Using borrowed money to invest more and try to earn more, which is usually very risky.
   - _The fund relied heavily on leverage, borrowing four dollars for every dollar its investors put in._
   - _When prices fell, traders using high leverage were forced to sell at a loss._
5. The ratio of a company's debt to its equity.
   - Simple: A number that compares how much a company owes with how much its owners have put in.
   - _Analysts flagged the retailer's leverage, which had doubled after the buyout._
   - _Lower leverage gives a company more room to survive a bad year._
6. The capacity of a business to earn very high returns when its facilities operate at or near full capacity.
   - Simple: The chance for a business to earn much more when its factory or other site runs close to full.
   - _Because most of its costs are fixed, the steel mill has enormous leverage when it runs near full capacity._
   - _Hotels with high leverage see profits jump sharply once occupancy passes a certain point._
7. In regression analysis, how far an observation's values for the independent variables lie from those of the other observations.
   - Simple: In statistics, how far one data point's input values are from those of the other points.
   - _An observation with high leverage can pull the regression line toward itself._
   - _The software flags any case whose leverage is well above the average._

## Verb

3. To use or exploit something, such as a resource, connection or piece of publicity, so as to take full advantage of it. *(slang, US)*
   - Simple: To use something you have as fully as you can to get something more.
   - _The startup is leveraging its partnership with a major bank to win new clients._
   - _Smart teams leverage existing tools instead of building everything from scratch._

## Origin

Formed from lever + the suffix -age.

Source: DictionaryAI, https://dictionaryai.com/define/leverage (written from Wiktionary data, CC BY-SA 4.0: https://creativecommons.org/licenses/by-sa/4.0/).