Definition, Meaning & Synonyms

overleveraged

Adjective

/ˌoʊvərˈlɛvərɪdʒd/

Definition

Having taken on too much debt relative to equity, leading to greater financial risk.

Examples

The company’s overleveraged status made investors nervous.
After taking multiple loans, he realized he was overleveraged and needed to restructure his finances.
Being overleveraged in a declining market can lead to severe losses.

Meaning

When a company or individual borrows more money than they can handle in relation to their assets or equity, they are considered overleveraged. This situation can lead to financial instability and increase the risk of bankruptcy.