... the leverage gained, e.g., £100,000 would buy one house outright, and £100,000 split on ten 10% deposit mortgages with sit in tenants would effectively allow the individual to control assets in the region of £1,000,000. "When Debt is used successfully (operating earnings exceeding interest charges) the returns to shareholders are magnified through financial leverage"2. The debit ratio measures the percent of total funds provided by creditors. Debt includes both current liabilities and long-term debt. Creditors prefer low debt ratios. The lower the ratio, the greater the cushion against creditor's losses in liquidation. Owners may seek high debt ratios, either to magnify earnings or because selling new stock would mean giving up control. Owners want control while "using someone else's money. But creditors take a general debit ratio specific to the individual firms preserved future economic situation. The main applications where mixture of debit and equity in a firm's financial structure ...

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