Financial Leverage Ratio Calculator

Your details

Cash, receivables, inventory and other assets expected to convert within one year.
USD
Property, plant, equipment, intangibles and other long-term assets.
USD
All interest-bearing borrowings: short-term debt, long-term debt, and finance leases.
USD
Shareholders' equity from the balance sheet: paid-in capital plus retained earnings.
USD
Earnings before interest and taxes. Used only to calculate the interest coverage ratio.
USD
Annual interest paid on all debt. Used only for the interest coverage ratio.
USD
Financial leverage ratioModerate leverage
1.7

Total assets divided by total equity

Debt-to-equity0.7
Debt-to-assets0.41
Debt-to-capital0.41
Interest coverage5
Total assets1,700,000
Equity multiplier1.7
1.7 x
Low leverage<1.5Moderate1.5-2.5Elevated2.5-4High risk4+

This company is moderately leveraged with a financial leverage ratio of 1.70x.

  • A financial leverage ratio of 1.70x means that for every dollar of equity, the company controls 1.70 dollars of assets.
  • 41.2% of total assets are debt-financed and 58.8% are equity-financed according to the debt-to-assets ratio of 0.41.
  • The interest coverage ratio of 5.00x means EBIT is comfortably covering interest.
  • A debt-to-equity ratio of 0.70 indicates a balanced capital structure.

Next stepCompare these ratios against peers in the same industry segment, since capital structure norms vary widely across sectors.

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