Leverage ratio is a percentage that shows how much a company relies on debt to finance its assets and operations. It helps to compare the riskiness and healthiness of different companies by looking at how much they borrow. The formula for leverage ratio is:
Leverage ratio = (Total debt / Total assets) * 100
Where:
- Total debt is R0036,
short_and_long_term_debt
- Total assets is BS036,
bs_tot_asset