What are Financial Leverage Ratios?

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What are Financial Leverage Ratios?

What are Financial Leverage Ratios?

In traditional business courses, financial leverage ratios are ratios used to determine the solvency of a firm, and include the debt to equity ratio, the debt to assets ratio, and interest coverage which equals EBIT/interest charges.

The concept of leverage also applies in trading, as Forex traders use leverage by trading with more dollars that are actually in their accounts.

   

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