It is defined as the overall cost of capital or the average cost of various sources of financing employed by the company. When the capital of the company consists of funds raised from different sources enabling different costs. More
The term leverage refers to the relationship between two inter-related variables. It is the technique used by business firms to measure risk and return relationship of different alternative capital structures.
In financial analysis, it represents the influence that one financial variable has over some other related financial variables. These financial variables may be sales, cost, EBIT, EPS, etc. More