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Finance Dictionary and Glossary of Investment Terms
Leverage Ratio
Definition 1.
Total assets divided by total stock equity. This figure gives some indication of how highly leveraged a company is. If the ratio is high -- if assets far exceed stock equity -- then the company is quite leveraged. This can be lucrative during good times, when borrowed assets earn more than they cost, but if things go bad the company could have trouble servicing the debt implied by all this leverage.
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