Financial leverage is the ratio of debt capital to total assets, i.e. the formula is the same as for the Debt ratio.
The effect of financial leverage is one of the effects causing the fact that the use of debt capital can be more advantageous than equity. It has a positive effect in the case that revenues generated by the use of debt capital exceed the cost of debt (interest expense). It then also results in an increase in return on equity. But if the cost of debt capital exceeds the benefits arising from its use, this leverage effect works of course, conversely.