leverage metrics
Leverage metrics compare the costs and returns of funds from both sourcesâdebt funding and equity funding. As a result, Leverage metrics measure the increase in earning power a firm can expect from borrowing, when the business is doing well. And, the same leverage metrics show how the firm loses earning power when business is doing poorly. Capital Structure and Financial Structure. Note that the leverage metric Long term debt to equities ratio equates to the firm's capital structure.