Series 6: 7.4.1.5.2. Measures Of Financial Leverage

Taken from our Series 6 Top-off Online Guide

7.4.1.5.2. Measures of Financial Leverage

Leverage ratios measure a company’s ability to service its long-term debt. In general, the greater a company’s earnings the more likely a company can make payments on its debt, and leverage ratios reflect this fact. The leverage ratios you will need to know are the following:

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