This is ratio of debt capital to equity.  That is, in proportion to your means = guarantee your risk!

It probably depends on the purpose of your research.  Typically I would start with the audited balance sheet short and long term debt, so not including supplier creditors, tax liabilities or accruals.  Although it could include shares which are convertible to debt if that option is likely to be exercised in the near future.  For most of my purposes I would not consider the ratio of debt to market value as market value changes second-by-second based on market sentiment. 

FINANCIAL LEVERAGE: The use of borrowed money to increase production. Production may be measured by sales and earnings.

(i) Income statement approach:

DFL = EBIT / (EBIT - interest expense)

(ii) Balance sheet approach:

DFL = Total Debt / shareholder's equity

http://en.wikipedia.org/wiki/Leverage_%28finance%29

You can also look to some cross sectional studies on different definitions of financial leverage i.e., Fama & French (1992) & Penman, Richardson & Tuna (2007). Differences lie in market value or book value based ratios.

Be careful not to confuse the term with the leverage ratio for a bank which refers to capital adequacy.

DFL = EPS/EBIT 

EPS growth corresponds to increasing Debt (MM- II proposition) 

Also expressed as DCL= DOLXDFL where DOL is the contribution in % netting Variable cost from realised sales and thus DCL is the Net Margin on Sales

Margin/Sales(==DCL) = EBIT/Sales(==DOL) X EPS/EBIT(==DFL)

This holds where effectof Tax is counted and effect of Financial Distress is ignored. 

Overall effect of Financial distress reduces valuation after an optimum percentage of debt is reached in the Capital Structure which can be reduced independently from the Value of the levered firm

Also operating leverage refers to the use of your assets (FA) and thus gets skewed for the firm with higher Fixed assets and investment while Financial leverage increases the profitability of the firm till Financial Distress  costs are material. In that respect overhangs in Debt / Equity and Debt Service Coverage Ratio can be used to comment on whether the Debt is post optimal or providing good Financial Leverage

Financial leverage is the degree to which a company uses fixed-income securities such as debt and preferred equity.

for more info you can visit Investopedia.

http://www.investopedia.com/walkthrough/corporate-finance/5/capital-structure/financial-leverage.aspx

The most common definition of financial leverage used in the literature is debt/total assets. An alternative is debt/equity ratio. These two measures of financial leverage move in the same direction, however the variability of debt/equity will be higher than the variability of debt/total assets ratio.

Briefly, what part of assets are financed with debt.

Hello!

According to INVESTOPEDIA:

Financial leverage is the degree to which a company uses fixed-income securities such as debt and preferred equity. The more debt financing a company uses, the higher its financial leverage. A high degree of financial leverage means high interest payments, which negatively affect the company's bottom-line earnings per share.

Financial risk is the risk to the stockholders that is caused by an increase in debt and preferred equities in a company's capital structure. As a company increases debt and preferred equities, interest payments increase, reducing EPS. As a result, risk to stockholder return is increased. A company should keep its optimal capital structure in mind when making financing decisions to ensure any increases in debt and preferred equity increase the value of the company. (Learn more about leverage in ETFs: Losing At Leverage and 5 Ways Debt Can Make You Money.)

Degree of Financial Leverage

The formula for calculating a company's degree of financial leverage (DFL) measures the percentage change in earnings per share over the percentage change in EBIT. DFL is the measure of the sensitivity of EPS to changes in EBIT as a result of changes in debt.

Formula:

DFL = percentage change in EPS or EBIT

percentage change in EBIT EBIT-interest

A shortcut to keep in mind with DFL is that if interest is 0, then the DLF will be equal to 1.

Example: Degree of Financial Leverage

With Newco's current production, its sales are $7 million annually. The company's variable costs of sales are 40% of sales, and its fixed costs are $2.4 million. The company's annual interest expense is $100,000. If we increase Newco's EBIT by 20%, how much will the company's EPS increase?

Calculation and Answer:

The company's DFL is calculated as follows:

DFL = ($7,000,000-$2,800,000-$2,400,000)/($7,000,000-$2,800,000-$2,400,000-$100,000)

DFL = $1,800,000/$1,700,000 = 1.058

Given the company's 20% increase in EBIT, the DFL indicates EPS will increase 21.2%.

Financial leverage refers to the utilization of financial resources not owned by the company (borrowed) to invest in a larger amount of assets than would be possible if the company only used its equity base.

Firstly, you must understand that with financial leverage (FL) "there are many ways to skin the cat". That is, there may be several applicable ratios including those already mentioned by you and others above. It depends on the exact situation of the problem you intend to solve.

Having said that, I must acknowledge the detailed analysis of Lulia Monica Oehler-Sincai, who reminded us of the degree of financial leverage (DFL), a useful tool for sensitivity analysis in this area. 

DFL points out the double-edged nature of FL, i.e. as a firm trades on its equity, its total market value (MV) will increase by more than one unit as a result of one unit increase in operating income. However, one unit reduction in operating income will cause more than one unit decrease in total market value. Trading on equity is simply the choice of acquiring long term debt in preference of owners equity.

To that extent, the two most important operative concepts surrounding FL are long term financial resources and market value. We must also qualify what constitutes long term financial resources. The capstone for all such instruments may be fixed interest financial resources. This understanding is necessary because interest is a tax deductible item in the income statement.  That is: what happens to MV if fixed interest securities increase? The traditional theory of capital structure assumes that a firm can increase its market value through the use of financial leverage. Modigliani and Miller (MM) argue that the MV remains the same with the use of financial leverage. Recall that their arguments have sustained the excitement in capital structure.

My recommendation is therefore to employ the ratio of fixed interest securities to total market value.

why not using:

Leverage http://www.oxforddictionaries.com/de/definition/englisch/leveragehttp://www.oxforddictionaries.com/de/definition/englisch/leverage

2 Finance The ratio of a company’s loan capital (debt) to the value of its ordinary shares (equity); gearing.

2.1The use of credit or borrowed capital to increase the earning potential of shares.

Hi,

I think it dépends of your purpose. If you are interested by the default risk, the quantitity of debt, its seniority, its maturity and its diversity (bank loan , bond)  matter. If you want to focus on profitability (net income/equity), the total bulk of debt and its mean cost are at stake . If you want to mitigate agency costs, hybrid debt is more important than the other debts, and the threshold allowing converibility is also.relevant.

Hi

I think you may be benefit from this paper, because you may consider a dynamic definition of leverage:

M Halling, J Yu, J Zechner, "Leverage dynamics over the business cycle", Journal of Financial Economics, 2016, forthcoming

Best regards.