What is financial leverage? Expalin the same with suitable examples extracted from retail business.

Financial leverage refers to the use of borrowed funds, or debt, to amplify the potential return on investment (ROI) of a business. In retail operations and store management, financial leverage plays a critical role in expanding a business, managing cash flow, and enhancing profitability. It enables retailers to acquire assets or make investments without needing to use all their own capital. However, it also comes with risks, as excessive leverage can lead to financial distress if a company cannot meet its debt obligations.

To illustrate financial leverage in the retail sector, let's consider a few examples:

### Example 1: Opening a New Store Location

Imagine a retail chain, "Trendy Threads," that specializes in clothing and accessories. The company identifies a potential new store location in a high-traffic shopping area that requires an investment of $1 million for leasehold improvements, inventory, and marketing. Trendy Threads has $400,000 in equity but needs to raise the remaining $600,000.

To finance this expansion, the company decides to take out a loan. By borrowing $600,000, the company can invest a total of $1 million into the new location. 

Assuming the new store generates annual revenues of $1.5 million and incurs operating expenses of $1 million, the net income for the store would be $500,000. After paying _______ ________ _______ _____ ___ ___ ______ ________ _______ ___.
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