Measures the degree to which a company relies on debt to finance its assets.

What it Measures ?

How much we depend on borrowed money to fund assets.

Relevant StakeHolders 

CFO, Risk Manager

In-depth Use Case / Real-world Example

Financial Leverage Ratio is calculated by dividing total assets by total equity. For example, if a company has ₹2,000,000 in assets and ₹1,000,000 in equity, the ratio is 2.0. A higher ratio indicates greater reliance on debt, which increases financial risk but can also enhance returns.