Financing leverage refers to a financial management activity in which an enterprise plans to acquire other enterprises for structural adjustment and asset reorganization, and uses the assets and future profitability of the acquired enterprise as collateral to raise some funds from the bank for acquisition. And generally speaking, the funds borrowed by financing leverage account for about 70% of the total acquisition funds, and the rest are used as their own funds. In addition, the total debt ratio of companies acquired and restructured through financing leverage is often above 85%, and most of the liabilities are borrowed from banks.

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In financing leverage, the financing margin ratio can be used to control the magnification of investors' initial investment funds. When investors conduct financing or securities lending transactions, the margin paid will reach the margin ratio. When the margin amount reaches a certain proportion, the higher the margin ratio, the smaller the scale of securities companies' financing or securities lending to investors. Therefore, the financial leverage effect will become lower.