: Measures the percentage of assets financed through debt.
: The most common metric, calculated as Total Debt / Shareholders' Equity , measuring dependence on borrowed funds.
: The Financial Stability Board (FSB) released a final report specifically addressing risks created by leverage in Nonbank Financial Intermediation (NBFI), such as hedge funds and life insurers. Leverage
: Assesses a firm’s ability to pay interest on its debt with its current earnings (EBIT / Interest Expense).
Authoritative bodies monitor leverage levels to assess risks to the broader financial system: : Measures the percentage of assets financed through debt
: Often used by credit agencies, calculated as (Total Debt - Cash) / EBITDA . Leverage in Nonbank Financial Intermediation: Final report
Reports for individual companies or funds typically utilize these foundational ratios to gauge risk: : Assesses a firm’s ability to pay interest
: The November 2025 report noted that vulnerabilities from financial-sector leverage remain notable, with hedge fund leverage reaching historical highs in early 2025.