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

Howell agreed with the Warmbiers’ lawyers that their son had been used as leverage in North Korea’s confrontation with the United States involving nuclear testing and economic sanctions. Marisa Iati, Washington Post, "Otto Warmbier’s family is suing for a North Korean coal ship seized by U.S. officials," 7 July 2019 That has reduced Iran’s leverage — and helps explain Rouhani’s drive to break out of some of the accord’s restrictions. David E. Sanger, BostonGlobe.com, "Iran announces new breach of nuclear deal," 7 July 2019 The alternative is to modify our lifestyles to fit within our environmental constraints: use less water-thirsty crops, leverage the adaptive assets of local plants and animals (no-tillage farming and bison) to more efficiently use our land. Dp Opinion, The Denver Post, "Letters: Rounding up geese from parks — cruel or beneficial? (7/7/19)," 7 July 2019 So, brands have learned to leverage outrage, rather than joy or humor or political zeitgeist, for their own gain. Luke Winkie, Vox, "Ad campaigns and new products like Charmin’s “Forever” roll and IHOb drum up internet outrage. That’s the point.," 27 June 2019 Throughout the 1980s and early 1990s, several other teams used it as leverage in their quests to land new stadiums. Jared Diamond, WSJ, "The Rays Can’t Get One New Stadium. Now They Want Two.," 26 June 2019 The timing suggests that Mr Xi may be looking for leverage over America in the two countries’ deepening trade war. The Economist, "Kim Jong Un entertains Xi Jinping at home," 21 June 2019 Krawcheck, who left Citigroup in September 2008 a week after the implosion of Lehman Brothers, said Wall Street's lack of diversity only added to the problems caused by excessive leverage and greed. Matt Egan, CNN, "Sallie Krawcheck: Wall Street's lack of diversity contributed to the financial crisis," 21 June 2019 On this score, Sudan’s suspension could provide useful leverage. Adem K Abebe, Quartz Africa, "In Sudan, the African Union reminds us it still has a key role in tackling the continent’s crises," 7 June 2019

Recent Examples on the Web: Verb

Marcoux told the committee on May 21 that there are only two tax incremental financing districts in Walker's Point that could be leveraged and those alone couldn't be used to pay for the construction of a route south. Alison Dirr, Milwaukee Journal Sentinel, "Delays to Milwaukee streetcar extension jeopardize funding source, Barrett administration says," 5 July 2019 The broadcaster has struggled financially since a 2007 leveraged buyout. Bloomberg, latimes.com, "Univision to seek buyer after selling Gizmodo online businesses," 3 July 2019 The Department of Justice is being leveraged as a political weapon. Jeff Berman, Vox, "Big Tech needs regulation, but DC must go to school before it goes to work," 14 June 2019 Battle counters that every city and region has something unique that can be leveraged to their advantage. Kim Chandler, The Seattle Times, "Battle: ‘We can do things better’," 12 May 2018 Their priority was raw personal power that could be leveraged for their own enrichment, privilege, and celebrity. Frank Rich, Daily Intelligencer, "The Original Donald Trump," 29 Apr. 2018 The company hopes to leverage its work developing life support systems for the Dragon spacecraft for life support inside the BFS. Eric Berger, Ars Technica, "NASA isn’t going to pay for the BFR, so Musk charts a new course," 18 Sep. 2018 Stable Genius is one of 20 companies in the journalism marketplace Civil, which is hoping to leverage the emerging technology blockchain to save media. Recode Staff, Recode, "Podcaster Manoush Zomorodi explains blockchain and how it might fix the media," 17 July 2018 Meituan recently launched trial ride-hailing services in two Chinese cities, hoping to leverage its large base of active customers who have used the app at least once in the past year. Liza Lin, WSJ, "Meituan Wants to Be the Grubhub of China (and the Yelp, and the Groupon, and the Kayak)," 21 June 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

11 Jul 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

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