Question: Financial analysts typically measure financial leverage as the ratio of

Financial analysts typically measure financial leverage as the ratio of debt to equity. However, there is less agreement on how to measure debt, or even equity. How would you treat the following items in computing this ratio? Justify your answers.
• Revolving credit agreement with bank
• Cash and marketable securities
• Operating leases
• Unrecorded pension commitments
• Deferred tax liabilities
• Preferred stock
• Convertible debt


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  • CreatedFebruary 11, 2015
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