The extent to which a company is finance by borrowed capital e.g loans what is that?

The extent to which a company is financed by borrowed capital, such as loans, is known as its leverage ratio. This ratio measures the proportion of a company's total capital that is funded by debt, as opposed to equity. A high leverage ratio indicates that a company has a significant amount of debt relative to its equity, which can increase financial risk but also potentially lead to higher returns. Conversely, a low leverage ratio indicates that a company relies more on equity financing, which may be less risky but could also limit growth opportunities.

Financial leverage