Leverage Ratio | Practical Law

Leverage Ratio | Practical Law

Leverage Ratio

Leverage Ratio

Practical Law Canada Glossary 2-623-5812 (Approx. 2 pages)

Glossary

Leverage Ratio

Also known as the Debt/EBITDA Ratio. The ratio of debt (borrowings) to earnings before interest, taxes, depreciation and amortization (EBITDA), often expressed as a percentage or ratio. It is often used as a measure of the risk attached to a company because a highly leveraged company has a large interest burden which has to be met whether or not profits are made.