Leverage ratios measure the degree to which a firm relies on borrowed funds in its operations.

Name: Leverage ratios measure the degree to which a firm relies on borrowed funds in its operations.
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Leverage ratios, such as debt-to-equity ratio and interest coverage ratio, measure the proportion of a company's financing that comes from debt or borrowed funds. Therefore, they indicate the degree to which the company relies on borrowed funds in its operations.

Leverage Ratios Measure the Degree to Which a Firm Relies