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deleverage

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Financial Dictionary

Deleverage

The reduction of financial instruments or borrowed capital previously used to increase the potential return of an investment. It is the opposite of leverage.

Investopedia Commentary

Increasing leverage increases a firm's risk, therefore, deleveraging attempts to lower risk.

When a firm deleverages its balance sheet, that's a sign of slowing growth.

Related Links

Reading The Balance Sheet

See also: Leverage, Leveraged Buyout

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