Financial Leverage Ratio Calculator
FinanceCalculate the financial leverage ratio (equity multiplier) to see how much a company relies on debt to finance its assets.
Financial Leverage Ratio
Total assets divided by total shareholder equity
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Odeh Ahwal0people find this calculator helpful
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Frequently Asked Questions
What does a financial leverage ratio of 2 mean?
A ratio of 2 means total assets are twice the size of shareholder equity, implying half the assets are funded by debt or other liabilities.
Is a higher financial leverage ratio always bad?
Not necessarily. Higher leverage can boost returns on equity when used well, but it also increases financial risk if earnings decline or interest rates rise.
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