what is a leverage ratio 
a leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt loans or assesses the ability of a company to meet its financial obligations the leverage ratio category is important because companies rely on a mixture of equity and debt to finance their operations and knowing the amount of debt held by a company is useful in evaluating whether it can pay off its debts as they come due several common leverage ratios are discussed below laura porter investopedia