Leverage Ratios | Definition | 4 Types of Leverage Ratios

In this video, we discuss Leverage Ratios definition along with its types and formula.

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐋𝐞𝐯𝐞𝐫𝐚𝐠𝐞 𝐑𝐚𝐭𝐢𝐨𝐬?
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Leverage Ratios are used to determine how much debt a firm has used.

𝐓𝐲𝐩𝐞𝐬 𝐨𝐟 𝐋𝐞𝐯𝐞𝐫𝐚𝐠𝐞 𝐑𝐚𝐭𝐢𝐨𝐬
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#1 - Debt Equity Ratio
#2 - Debt Capital Ratio
#3 - Debt-Assets Ratio
#4 - Debt EBITDA Ratio

𝐃𝐞𝐛𝐭 𝐄𝐪𝐮𝐢𝐭𝐲 𝐑𝐚𝐭𝐢𝐨 𝐅𝐨𝐫𝐦𝐮𝐥𝐚
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Debt Equity Ratio Formula = Total Debt / Total Equity

𝐃𝐞𝐛𝐭 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐑𝐚𝐭𝐢𝐨 𝐅𝐨𝐫𝐦𝐮𝐥𝐚
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Debt Capital Ratio Formula = Total Debt / (Total Equity + Total Debt)

𝐃𝐞𝐛𝐭 - 𝐀𝐬𝐬𝐞𝐭𝐬 𝐑𝐚𝐭𝐢𝐨 𝐅𝐨𝐫𝐦𝐮𝐥𝐚
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Debt - Assets Ratio Formula = Total Debt / Total Assets

𝐃𝐞𝐛𝐭 𝐄𝐁𝐈𝐓𝐃𝐀 𝐑𝐚𝐭𝐢𝐨 𝐅𝐨𝐫𝐦𝐮𝐥𝐚
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Debt EBITDA Ratio Formula = Total Debt / EBITDA

To know more about the 𝐋𝐞𝐯𝐞𝐫𝐚𝐠𝐞 𝐑𝐚𝐭𝐢𝐨𝐬, you can go to 𝐥𝐢𝐧𝐤 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐡𝐞𝐫𝐞: https://www.wallstreetmojo.com/levera...

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