Leverage

Through the Looking Glass: Bitcoin Treasury Companies

Through the Looking Glass: Bitcoin Treasury Companies ArXiv ID: 2507.14910 “View on arXiv” Authors: B K Meister Abstract Bitcoin treasury companies have taken stock markets by storm amassing billions of dollars worth of tokens in hundreds of entities. The paper discusses, how leverage - whether created through corporate debt or investors using stock as loan collateral - fuels this trend. The extension of the binary-choice Kelly criterion to incorporate uncertainty in the form of the Kullback-Leibler divergence or more generally Bregman divergence is also briefly discussed. ...

Capital Structure Theory: An Overview

Capital Structure Theory: An Overview ArXiv ID: ssrn-2886251 “View on arXiv” Authors: Unknown Abstract Capital structure is still a puzzle among finance scholars. Purpose of this study is to review various capital structure theories that have been proposed in the Keywords: Capital Structure, Trade-off Theory, Pecking Order Theory, Leverage, Corporate Finance, Equity Complexity vs Empirical Score Math Complexity: 3.0/10 Empirical Rigor: 2.0/10 Quadrant: Philosophers Why: The paper is a theoretical literature review discussing established capital structure theories (MM, Trade-off, Pecking Order) with minimal advanced mathematics or empirical backtesting, focusing instead on conceptual frameworks and historical context. flowchart TD A["Research Goal: Review Capital Structure Theories 'Capital Structure Theory: An Overview'"] --> B["Methodology: Literature Review"] B --> C["Key Inputs: Historical Finance Theories (Trade-off, Pecking Order, Market Timing)"] C --> D["Computational Process: Comparative Analysis & Synthesis of Findings"] D --> E["Key Outcome 1: Capital structure remains a puzzle (Context dependent, not one-size-fits-all)"] D --> F["Key Outcome 2: Trade-off & Pecking Order explain different aspects of leverage"] D --> G["Key Outcome 3: No single theory dominates; interplay of taxes, costs, & info asymmetry"]

Financial Statement Analysis of Leverage and How it Informs About Profitability and Price-to-Book Ratios

Financial Statement Analysis of Leverage and How it Informs About Profitability and Price-to-Book Ratios ArXiv ID: ssrn-292725 “View on arXiv” Authors: Unknown Abstract This paper presents a financial statement analysis that distinguishes leverage that arises in financing activities from leverage that arises in operations. The Keywords: financial statement analysis, leverage, operating leverage, financial leverage, Corporate Debt Complexity vs Empirical Score Math Complexity: 6.5/10 Empirical Rigor: 5.0/10 Quadrant: Holy Grail Why: The paper introduces formal leveraging equations and profitability decomposition (RNOA, net borrowing rate) requiring solid mathematical manipulation, but the core derivation is accounting-based rather than stochastic calculus. The empirical analysis uses cross-sectional regressions on market data to test hypotheses, indicating backtest-ready implementation and data dependency. flowchart TD A["Research Goal: Identify if Operating vs. Financial Leverage predicts Profitability & P/B Ratios"] --> B["Methodology: Decomposition"] B --> C["Data Inputs: Financial Statements Balance Sheet & Income Statement"] C --> D["Computational Process: 1. Operating Leverage 2. Financial Leverage"] D --> E["Computational Process: Regression Analysis: Impact on ROE & Price-to-Book"] E --> F["Key Finding 1: Operating Leverage positively correlates with profitability"] E --> G["Key Finding 2: Financial Leverage impact on P/B is non-linear"]