cchang

Yes gazhoo, agreed.

In this case, I am trying to justify why when both the items are from Balance Sheet, still it is using 'average' values.

In case of leverage, it shows firms target capital structure. And target capital structure may change in the course of a year. This is because, firm will strive for lowest cost of capital. And in course of one year, because of any change in external/internal conditions, this capital structure may change.

So, it may be appropriate to use 'average' values for this ratio, even though both numerator and denomenator are coming from balance sheet.