Leverage ratios measure how leveraged a company is, and a company's degree of leverage that is, its debt load is often a measure of risk. When the debt ratio is high, for example, the company has a lot of debt relative to its assets. It is thus carrying a bigger burden in the sense that principal and interest payments take a significant amount of the company's cash flows, and a hiccup in financial performance or a rise in interest rates could result in default.
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