Define the two ratio families lenders quote constantly in LBOs: leverage ratios and coverage ratios.

Leverage ratios measure the SIZE of the debt burden relative to earnings: total debt / EBITDA and net debt / EBITDA (net of cash), often split into senior leverage (senior debt / EBITDA) and total leverage through the junior tranches. They answer 'how many turns of EBITDA do we owe?' Coverage ratios measure the ABILITY TO SERVICE the debt from current earnings: interest coverage = EBITDA / interest expense (variants use EBITDA − capex to reflect real cash available), and fixed-charge coverage, which adds mandatory amortization, cash taxes, and sometimes capex to the denominator. Directionally: lenders want leverage LOW and coverage HIGH; leverage is the stock of risk, coverage is the flow. Both appear as covenant tests in credit agreements.