Financial leverage and profitability of a commercial bank

Finance is one of the most important functions in the operation and organization of a company especially a banking institution.the company is considered the basic unit of production.the classical theory of the firm assigns it an objective of maximizing profit according to its revenues and costs and presupposes the existence of a single decision-making center.A good management of the company supposes a mobilization of the financial resources adapted to the needs for its activities.these resources must be used advisedly in order to generate profits which will allow the company to refund its possible debts to carry out investments in order to develop.Aimsithe good management of the finances conditions the survival of the company because those leave a line in all the activities of the company. To finance its activity the company has two possibilities either it resorts to the equity capital or to the loan (indebtedness).