Financial leverage is used primarily to:

Financial leverage refers to the use of borrowed funds to increase the potential return on investment. By using debt financing, a company can amplify its earnings by investing more capital into productive activities than it could rely on just its equity base. When a firm successfully generates returns that exceed the cost of its debt, this results in enhanced profits for the equity holders.

The strategic use of financial leverage allows companies to undertake larger projects, expand operations, and potentially capture greater market share, all of which can lead to significant profit increases. However, it's important to note that while financial leverage can maximize profits, it also increases the company's overall risk. If the returns on investments made with the borrowed capital do not exceed the cost of that debt, the company may face financial distress.

Thus, the primary purpose of employing financial leverage is to maximize profits through the judicious use of borrowed funds, making it a critical tool in corporate finance when managed appropriately.