Leverage Ratio definition: Copy, customize, and use instantly
Introduction
The term "Leverage Ratio" refers to a financial metric used to assess the amount of debt used by an organization relative to its equity or assets. It provides insights into the financial structure and risk profile of the company. A higher leverage ratio may indicate a higher risk of insolvency, while a lower ratio suggests lower financial risk.
Below are various examples of how "Leverage Ratio" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Leverage Ratio" for financial covenants
This definition ties "Leverage Ratio" to financial covenants in loan agreements.
"Leverage Ratio" means the ratio of the Borrower's total debt to its total equity, as calculated in accordance with generally accepted accounting principles (GAAP), used to determine compliance with financial covenants under this agreement.
Definition of "Leverage Ratio" for credit facilities
This definition connects "Leverage Ratio" to credit facilities.
"Leverage Ratio" refers to the ratio of total consolidated debt of the Borrower to its total consolidated assets, which is used to assess the Borrower’s capacity to repay credit facility obligations.
Definition of "Leverage Ratio" for bond issuance
This definition links "Leverage Ratio" to bond issuance.
"Leverage Ratio" means the ratio of a company's net debt to its EBITDA, as used to evaluate the company's ability to meet bond obligations and determine the interest rate for bond issuance.
Definition of "Leverage Ratio" for capital structure
This definition applies "Leverage Ratio" to capital structure analysis.
"Leverage Ratio" refers to the proportion of debt financing relative to equity in a company's capital structure, used to measure the company's financial leverage and risk profile.
Definition of "Leverage Ratio" for investment purposes
This definition ties "Leverage Ratio" to investment evaluation.
"Leverage Ratio" means the ratio of total debt to shareholders' equity, used as a key metric by investors to assess the risk associated with an investment in the company.
Definition of "Leverage Ratio" for regulatory requirements
This definition connects "Leverage Ratio" to regulatory requirements.
"Leverage Ratio" refers to the minimum ratio of a financial institution's capital to its total exposure, as required by regulatory authorities to ensure the stability of the financial system.
Definition of "Leverage Ratio" for loan agreements
This definition links "Leverage Ratio" to loan agreements.
"Leverage Ratio" means the ratio of the Borrower's total debt to EBITDA, calculated at the end of each fiscal quarter, used to assess the Borrower’s ability to comply with loan terms and covenants.
Definition of "Leverage Ratio" for financial reporting
This definition applies "Leverage Ratio" to financial reporting.
"Leverage Ratio" refers to the ratio of a company's total debt to its total assets, reported in the financial statements to provide a measure of the company's financial risk and leverage.
Definition of "Leverage Ratio" for debt restructuring
This definition connects "Leverage Ratio" to debt restructuring.
"Leverage Ratio" means the ratio of a company's debt to its equity, which is used to evaluate the feasibility and terms of a debt restructuring arrangement.
Definition of "Leverage Ratio" for risk management
This definition links "Leverage Ratio" to risk management.
"Leverage Ratio" refers to the ratio of total liabilities to shareholders' equity, used as a risk management tool to assess financial leverage and the potential for financial distress.
Definition of "Leverage Ratio" for business valuation
This definition ties "Leverage Ratio" to business valuation.
"Leverage Ratio" means the ratio of a company’s debt to its equity, used as a valuation tool to assess the company’s capital structure and potential return on investment.
Definition of "Leverage Ratio" for liquidity assessment
This definition connects "Leverage Ratio" to liquidity assessment.
"Leverage Ratio" refers to the ratio of a company's short-term debt to its liquidity, used to assess the company’s ability to meet its short-term obligations.
Definition of "Leverage Ratio" for private equity investments
This definition links "Leverage Ratio" to private equity investments.
"Leverage Ratio" means the ratio of debt to equity in a private equity investment, used to evaluate the potential return and risk profile of the investment.
Definition of "Leverage Ratio" for corporate finance
This definition ties "Leverage Ratio" to corporate finance strategies.
"Leverage Ratio" refers to the ratio of debt to equity, used as an indicator of a company’s reliance on debt financing and its ability to generate returns for shareholders.
Definition of "Leverage Ratio" for loan-to-value ratio
This definition connects "Leverage Ratio" to the loan-to-value ratio.
"Leverage Ratio" means the ratio of the loan amount to the value of the asset securing the loan, used to assess the risk of default and the sufficiency of collateral.
Definition of "Leverage Ratio" for creditworthiness assessment
This definition links "Leverage Ratio" to creditworthiness assessment.
"Leverage Ratio" refers to the ratio of total debt to EBITDA, used by creditors to assess the Borrower’s ability to meet debt obligations and determine the creditworthiness of the company.
Definition of "Leverage Ratio" for investment grade rating
This definition applies "Leverage Ratio" to investment grade rating.
"Leverage Ratio" means the ratio of a company's total debt to EBITDA, used as a key factor in determining the company's investment grade credit rating.
Definition of "Leverage Ratio" for mergers and acquisitions
This definition ties "Leverage Ratio" to mergers and acquisitions.
"Leverage Ratio" refers to the ratio of debt to EBITDA, used in evaluating the target company’s financial position and assessing the feasibility of a merger or acquisition.
Definition of "Leverage Ratio" for capital adequacy
This definition connects "Leverage Ratio" to capital adequacy.
"Leverage Ratio" means the ratio of a financial institution's capital to its total assets, used to ensure the institution has sufficient capital to withstand financial stress.
Definition of "Leverage Ratio" for debt financing
This definition links "Leverage Ratio" to debt financing.
"Leverage Ratio" refers to the ratio of a company's total debt to its total equity, used by lenders to assess the company’s ability to manage debt financing.
Definition of "Leverage Ratio" for shareholder equity
This definition ties "Leverage Ratio" to shareholder equity.
"Leverage Ratio" means the ratio of debt to shareholders' equity, used to evaluate the financial risk associated with the company’s capital structure.
Definition of "Leverage Ratio" for working capital management
This definition connects "Leverage Ratio" to working capital management.
"Leverage Ratio" refers to the ratio of a company's debt to its working capital, used to assess the company’s ability to manage its short-term obligations.
Definition of "Leverage Ratio" for project finance
This definition applies "Leverage Ratio" to project finance.
"Leverage Ratio" means the ratio of debt to equity in a project finance arrangement, used to evaluate the risk and return profile of the project.
Definition of "Leverage Ratio" for profitability analysis
This definition ties "Leverage Ratio" to profitability analysis.
"Leverage Ratio" refers to the ratio of a company’s debt to its net income, used to assess the company’s ability to generate profits while managing debt.
Definition of "Leverage Ratio" for capital markets
This definition connects "Leverage Ratio" to capital markets.
"Leverage Ratio" means the ratio of debt to equity, used to assess the company’s capital structure and its attractiveness to investors in the capital markets.
Definition of "Leverage Ratio" for credit risk
This definition links "Leverage Ratio" to credit risk.
"Leverage Ratio" refers to the ratio of a company's debt to its equity, used as an indicator of credit risk and a determinant for the company’s borrowing capacity.
Definition of "Leverage Ratio" for distressed companies
This definition ties "Leverage Ratio" to distressed companies.
"Leverage Ratio" means the ratio of a distressed company's debt to equity, used to assess its financial stability and potential for recovery.
Definition of "Leverage Ratio" for private debt markets
This definition connects "Leverage Ratio" to private debt markets.
"Leverage Ratio" refers to the ratio of a company's debt to EBITDA, used in the private debt market to evaluate the company’s ability to service its debt.
Definition of "Leverage Ratio" for credit facility pricing
This definition links "Leverage Ratio" to credit facility pricing.
"Leverage Ratio" means the ratio of total debt to EBITDA, used by lenders to determine the pricing of credit facilities and the risk profile of the borrower.
Definition of "Leverage Ratio" for bank lending
This definition ties "Leverage Ratio" to bank lending.
"Leverage Ratio" refers to the ratio of a company’s total debt to its total equity, used by banks to assess the financial health of the borrower and determine the lending terms.
Definition of "Leverage Ratio" for tax purposes
This definition connects "Leverage Ratio" to tax purposes.
"Leverage Ratio" means the ratio of a company's debt to its equity, used for determining the eligibility for certain tax benefits or deductions associated with debt financing.
Definition of "Leverage Ratio" for equity financing
This definition links "Leverage Ratio" to equity financing.
"Leverage Ratio" refers to the ratio of debt to equity, used in evaluating the company's approach to financing projects through equity or debt.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.