Relationship between debt and financial leverage

Reference no: EM133196565 , Length: 2 Pages

Assignment:

1. The more debt a firm uses, the greater its financial leverage, which magnifies both risk and return. Discuss the relationship between debt and financial leverage and the ratios used to analyze a firm's debt. Your responses should include at least two peer-reviewed sources for support of your findings.

2. Ratio analysis enables stockholders, lenders, and the firm's managers to evaluate the firm's financial performance. Compare and contrast who uses financial ratios and for what purposes they use the ratios.

Reference no: EM133196565

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