Series 7: 9.4.1.5.2 Measures Of Financial Leverage

Taken from our Series 7 Top-off Online Guide

9.4.1.5.2 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 interest coverage and debt-to-equity ratios.

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