Interest leverage is a very common term in modern finance, which is usually used to describe the borrowing leverage used by enterprises in loan or financing activities. Simply put, it is a kind of financial lever, which is used to measure the relationship between enterprise interest expenditure and enterprise net income. Its calculation method is usually: net profit divided by interest expense, the higher the result, the smaller the interest burden of the enterprise, the greater the result and the higher the burden.

Interest leverage is one of the key factors in enterprise financing activities, and it is also a factor that many banks need to consider when approving loans and credit lines. If enterprises can maximize their interest leverage, they can achieve more profits under the same loan reference. However, even so, enterprises can't borrow too much, otherwise they will fall into financial problems such as excessive interest expenses and poor capital turnover.

When investing, you can usually get better investment returns by understanding and applying the leverage principle. In securities trading, leverage usually refers to the difference in stock trading lent by securities brokers to investors. Similar to interest leverage, securities leverage is also a double-edged sword, which can increase profit potential and may also increase loss risk. Therefore, investors need to have enough knowledge and experience to make rational use of leverage as an investment tool.