Leverage Ratios Calculator

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Leverage ratios assess the level of a company’s debt relative to its equity or assets, indicating financial risk and the extent of reliance on borrowed funds. More info →

Input

Enter financial data to calculate leverage ratios.

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How This Calculator Works

Leverage ratios show how much a company relies on borrowed money and how easily it can carry that debt. From four figures, the calculator works out five ratios, each shown as a multiple (for example 0.50x).

The Formulas

Debt to Equity = Debt ÷ Equity · Debt to Assets = Debt ÷ (Debt + Equity)
Equity Multiplier = (Debt + Equity) ÷ Equity
Debt to EBITDA = Debt ÷ EBITDA · Interest Coverage = EBITDA ÷ Interest

Total assets are taken as debt + equity.

What Each Input Does

Total Debt: All borrowings, short and long term.
Total Equity: Shareholders' funds. If it is zero or negative, ratios based on it are shown as not meaningful.
EBITDA: Operating earnings before interest, tax, depreciation and amortization.
Interest Expense: Interest paid on the debt in the same period.

Step by Step

Each ratio is worked out from the formulas above.
All ratios are rounded to 2 decimals.

Reading the Result

Lower debt ratios – less reliance on debt and lower financial risk.

High Debt to EBITDA – it would take many years of earnings to repay the debt.

Higher interest coverage – more room to meet interest payments.

Quick Example

Debt 500,000, equity 1,000,000, EBITDA 200,000, interest 50,000. Debt to equity 0.50x, debt to assets 0.33x, equity multiplier 1.50x, debt to EBITDA 2.50x and interest coverage 4.00x.