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i must be missing something, but how does this even remotely check out?: > Leverage is the ratio of your liabilities to your equity. Simple division. Fourth gr

i must be missing something, but how does this even remotely check out?: > Leverage is the ratio of your liabilities to your equity. Simple division. Fourth grade math. If you have $110 million in assets and $100 million in liabilities you, by subtraction, have $10 million in equity against your $100 million in liabilities. You are said to be levered 10:1. how are you levered 10:1 when assets > liabilities? really feel like i am missing something.

Armisael16 4y ago
You started with $10 million. You took out an interest-free loan for another $100 million, so you have $110 million in assets (the money) and $100 million in liabilities (the debt). You’re levered 10:1 because you have $100 in borrowed assets you have to pay back and only $10 million in assets you fully own.