There are entire textbooks dedicated to balance sheet management and capital structure theories. Luckily, you don’t need to understand the intricate details of securitisation or treasury strategies. If nothing else, you just need to understand what happens when bad balance sheets happen to good people.The word "leverage" has been hijacked by the MBA-types and watered down through overuse. It’s been a more enjoyable experience holding gold shares this year than reading yet another sentence that starts with: "We will leverage our capabilities in …"If you’ve looked at a 2021 share price chart for AngloGold, for example, you’ll fully understand that analogy. Gold has been on a wild ride that has only recently started to come right.As in science, the concept of leverage simply refers to a force being applied on one end producing a greater force on the other. In finance, the input is either revenue or equity, depending on whether we are considering operating or financial leverage.Ever hea...

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