Leverage ratios are financial metrics used to assess a company's debt levels relative to its equity or assets. They help investors and analysts understand how much debt a company is using to finance its operations and whether it can meet its financial obligations. Common leverage ratios include the debt-to-equity ratio and the debt ratio. These ratios provide insights into a company's financial stability and risk. A higher leverage ratio may indicate greater risk, as it suggests the company relies more on borrowed funds. Conversely, a lower ratio may imply a more conservative approach to financing, potentially leading to lower financial risk.