he Off-balance sheet technique is used by many financial and non-financial companies. The reasons behind the usage are that risk is managed, borrowing cost reduces and collaboration with other companies is possible. While taking debt, most often, no or some liabilities are displayed in the balance sheet by managers to reporting their financial position. Leveraging financial position is the main reason for considering off balance sheet reporting. Operating and capital leases are directly related to the extent to which a company wants the operating or financial leverage to be. Debts do not appear with the operating lease, which reduce the financial leverage and increases the operating leverage. On the other hand, in capital lease, debts are recorded to leverage the financial position of the company (Torre & Hamilton, 2009). The main focus of the company to use off-balance sheet financing is to show the debt equity ratio low in the balance sheet. It helps in driving higher prices for stocks of that company.