Calculating Financial Leverage of Company X

Company X has total assets of $2,000,000 and total liabilities of $1,200,000. The company’s equity can be calculated by subtracting total liabilities from total assets. If Company X has net income of $300,000, calculate the financial leverage of the company. Financial leverage can be assessed using the Debt to Equity Ratio, which is expressed as Total Liabilities divided by Total Equity.