Homework Answers
leverage is a ratio of the company's debt and equity. Highly leveraged means that the company has taken on too many loans and is in too much debt.
Total Fund equired -143430 $ (51634.8+91795.2)
Debt - $51634.8
Leverage ratio - Debt / Total Funds = 51634.8 / 143430 = 56.25% = 0.56 (Leverage Ratio)
Ideal Leverage ratio is 0.5 or lesser is ideal, it means debt should be no more that 50% of total funds.
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