This is the measure of the amount of debt relative to total investment.

Question

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Financial leverage is the measure of the amount of debt relative to total investment. It helps in assessing the amount of debt a company uses to finance its assets and operations. High financial leverage indicates that a company has taken on a significant amount of debt, which can be a risk if the company is unable to generate enough cash flow to pay off the debt or interest payments. Therefore, it is an important metric to consider when analyzing a company's financial health.

This Is the Measure of the Amount of Debt Relative