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What is meant by financial Leverage ? and what are the ratios used for financial leverage?

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Question added by Badruddien Gismallah Ali Abdurahman , مدير مالي واداري , شركة العواد للاستثمار والتطوير
Date Posted: 2014/11/16
Dawood Kapasi
by Dawood Kapasi , Consultant , Deloitte

Financial leverage means the amount which they borrow from raising debt or issue equity. More debt means higher finanicial leverage and higher interest to be paid. If there is an increase in debt then there is an increase in debt, Financial leverage is actually moving a big stone with a metal pole.

 

Debt to equity ratio,% change EPS /  % change EBIT

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