What is Leverage Ratio
The formula looks like this. This leverage ratio examines a companys ability to pay off its incurred debt. Leverage Ratios Accounting Education Financial Strategies Leverage The most important leverage ratio is the debt to equity ratio. . The following are some common leverage ratios. Financial leverage is a strategy where your company uses Debt to acquire assets. The most popular leverage ratio the debt-to. Leverage ratios show how much of a companys capital comes from debt. The leverage ratio is a measure of a firms financial risk. A companys financial leverage ratio shows the level of debt in comparison to its accounts such as the income statement cash. This gives you an idea about a companys debt and the equity it has available. The companys ability to pay off those debts if needed. Read more of our ratio definitions to help you understand how companies are performing. A high ratio ind...