le·​ver·​age | \ ˈle-və-rij How to pronounce leverage (audio) , ˈlē-; ˈlev-rij, ˈlēv-\

Definition of leverage

 (Entry 1 of 2)

1 : the action of a lever or the mechanical advantage gained by it
2 : power, effectiveness trying to gain more political leverage
3 : the use of credit to enhance one's speculative capacity


leveraged; leveraging

Definition of leverage (Entry 2 of 2)

transitive verb

1 : to provide (something, such as a corporation) or supplement (something, such as money) with leverage also : to enhance as if by supplying with financial leverage
2 : to use for gain : exploit shamelessly leverage the system to their advantage— Alexander Wolff

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Examples of leverage in a Sentence


The union's size gave it leverage in the labor contract negotiations. The player's popularity has given him a great deal of leverage with the owners of the team. I used the leverage of the bar and a wooden block to pry the rock out of the hole.


The company wants to leverage its brands more effectively. a reality show contestant who's trying to leverage her 15 minutes of fame
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Recent Examples on the Web: Noun

But so much of streaming is catalogued, and labels control the catalog, and that is just the point of leverage. Eric Johnson, Recode, "Former Ticketmaster CEO Nathan Hubbard explains why live venues are leaving money on the table," 11 Oct. 2018 Washington wants the North to first provide a list of the contents of its nuclear arsenal before agreeing to that war declaration, which could remove a big piece of diplomatic leverage over the North. Fox News, "Trump says he believes nuclear deal with N.Korea possible," 28 Sep. 2018 The Youth Council tackles these systemic issues by meeting with Reservation leaders, state officials and amongst themselves to brainstorm ways to leverage existing resources and gain access to new ones. Teen Vogue, "The Turtle Mountain Youth Council is Helping Chippewa Teens Find Their Voices," 11 Mar. 2019 Trump could again use the peril to Dreamers as leverage to demand his own shifting but politically explosive set of immigration policy goals. Ed Kilgore, Daily Intelligencer, "Why the GOP Might Face More Humiliation on Immigration," 2 July 2018 Some Democrats have speculated that Trump is using the humanitarian crisis as leverage to negotiate a tougher immigration bill, an assertion the White House has rejected. Anne Flaherty, Anchorage Daily News, "The immigration crisis: How we got here and what’s next," 19 June 2018 That could serve as leverage, but the Fort Worth resident and former Rangers starter has also been pitching well. Jeff Wilson, star-telegram, "Gallardo is pitching well, but there's another reason Rangers may pick him to replace Moore," 12 June 2018 Democrats argued that the GOP was using the relief for cities, school districts and local agencies as leverage on the larger pension reform bill amid protests from teachers and other public employees. Phillip M. Bailey, The Courier-Journal, "Louisville avoids 'crippling' budget cuts from soaring pension costs thanks to override of Bevin's veto," 17 Apr. 2018 That will give the new government leverage in its dealings with the United States that the departing Mr. Peña Nieto, who is deeply unpopular, does not have. Elisabeth Malkin, New York Times, "U.S. Delegation and Mexico’s Next President Aim to Reset Relations," 13 July 2018

Recent Examples on the Web: Verb

In fact, your ability to leverage your extended network is one of your best skills. Aliza Kelly Faragher, Allure, "What October's Capricorn Horoscope Means for You," 30 Sep. 2018 Based on Twitter messages and other exchanges, the FBI says Butina moved to Washington on Torshin’s order to leverage their NRA contacts — and lay the groundwork for a long-term influence campaign. Matthew Bodner, The Seattle Times, "Misfire: Maria Butina’s strange route from Russia to U.S. jail," 10 Sep. 2018 Based on Twitter messages and other exchanges, the FBI says Butina moved to Washington on Torshin's order to leverage their NRA contacts — and lay the groundwork for a long-term influence campaign. Matthew Bodner And Angela Charlton, Fox News, "Misfire: Maria Butina's strange route from Russia to US jail," 10 Sep. 2018 But his attempts to leverage his conviction for outsider street cred in a pro-Trump Staten Island district failed. Amber Phillips, BostonGlobe.com, "Winners and losers: Joe Crowley and the Democratic Party are the big losers in Tuesday’s primaries," 28 June 2018 He was hired in large part because of his network of executives and agents and a belief on ownership’s part in his ability to leverage that network to facilitate the addition of talent. David Murphy, Philly.com, "On Bryan Colangelo, the one certainty for the Sixers is they have to move fast | David Murphy," 31 May 2018 However, the former New York mayor's apparent plan to leverage his history with Mueller to speed the end of the investigation seems highly optimistic, given the special counsel's by-the-book style. Stephen Collinson, CNN, "Comey memos renew questions over Trump's behavior," 20 Apr. 2018 The shift comes as emerging digital tools put growing pressure on firms across all industries to get an edge on competitors by leveraging innovative technologies that propel growth, Diana McKenzie, CIO of Workday Inc., told CIO Journal. Angus Loten, WSJ, "It Is the Year of More for CIOs: Pay, Workload and Influence Are on the Rise," 25 Feb. 2019 Courtsey This distaste for anger might seem ironic to anyone who watched two candidates on both ends of the political spectrum—Donald Trump and Bernie Sanders—wildly succeed by leveraging that exact emotion. Julie Zeilinger, Marie Claire, "The Women Who Ran...and Lost," 24 Oct. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'leverage.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of leverage


1830, in the meaning defined at sense 1


1957, in the meaning defined at sense 1

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Statistics for leverage

Last Updated

16 May 2019

Look-up Popularity

Time Traveler for leverage

The first known use of leverage was in 1830

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More Definitions for leverage



Financial Definition of leverage

What It Is

Leverage is any technique that amplifies investor profits or losses. It's most commonly used to describe the use of borrowed money to magnify profit potential (financial leverage), but it can also describe the use of fixed assets to achieve the same goal (operating leverage).

How It Works

Financial Leverage

Let's look at selected balance sheet and income statement information for Company XYZ.

Company XYZ has invented a new product that will revolutionize the widget market, but it needs to build a new $1,000,000 factory. It must choose between using equity or long-term debt to build the factory. We can see the impact on profits of both decisions.

Scenario A: Raise $1,000,000 by issuing new stock

XYZ is able to raise $1,000,000 by issuing 500,000 new shares at $2 per share. It builds its new factory and immediately sees revenues double and operating expenses increase by $300,000 (about 43%). Let's look at the impact on its financial statements:

Profit per share has almost tripled. That's pretty good.

Scenario B: Use financial leverage, raise $1,000,000 in debt

Let's see what happens if XYZ chooses to use $1,000,000 in debt to finance its new factory. Assume it can borrow at 5% per year.

By using leverage, Company XYZ increases the profit available to shareholders.

Operating Leverage
If we go back to Company XYZ, we can examine the effects of operating leverage on profits. Let's say the company is trying to choose between building their factory or outsourcing production to a third-party manufacturer. If they outsource production, they will pay $0.75 for each $1 widget they sell.

Scenario C: Outsource production instead of investing in additional fixed assets (the new factory)

As in the previous example, assume the company is able to double revenues when the new widget hits the market.

Comparing the results side-by-side, we can see the effects of leverage on profit potential:

Leverage it is not without risk. It requires a commitment to keep up with the principal and interest payments on the debt. If it's unable to do so, it will be forced into bankruptcy and shareholders will lose everything.

Why It Matters

Too much leverage can be bad, but there's no hard and fast rule as to how much is too much. No matter what its use, leverage can be a powerful tool when used responsibly. Savvy investors and companies use leverage to expand, hedge and speculate, but the overly aggressive can easily get in over their heads by losing money or going into bankruptcy.

For investors considering companies with debt, one of the most popular evaluations of a company's leverage is the debt-to-equity ratio (D/E). The interest coverage ratio, also known as times interest earned, is also a measure of how well a company can meet its interest-payment obligations. In general, these ratios suggest whether a company is "too safe" and is neglecting opportunities to magnify earnings through leverage or is overleveraged and at serious risk of default or bankruptcy.

Source: Investing Answers



English Language Learners Definition of leverage

 (Entry 1 of 2)

: influence or power used to achieve a desired result
: the increase in force gained by using a lever



English Language Learners Definition of leverage (Entry 2 of 2)

chiefly US : to use (something valuable) to achieve a desired result


le·​ver·​age | \ ˈle-vrij, -və-rij How to pronounce leverage (audio) \

Legal Definition of leverage

 (Entry 1 of 2)

: the use of credit to enhance one's speculative capacity


transitive verb
leveraged; leveraging

Legal Definition of leverage (Entry 2 of 2)

: to provide (as a corporation) or supplement (as money) with leverage

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More from Merriam-Webster on leverage

Rhyming Dictionary: Words that rhyme with leverage

Thesaurus: All synonyms and antonyms for leverage

Spanish Central: Translation of leverage

Nglish: Translation of leverage for Spanish Speakers

Britannica English: Translation of leverage for Arabic Speakers

Comments on leverage

What made you want to look up leverage? Please tell us where you read or heard it (including the quote, if possible).


a strong desire or propensity

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