Financial Leverage Ratio Calculator
Divide total assets by total equity to find the financial leverage ratio, also called the equity multiplier, showing how far assets are funded by debt.
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Enter total assets and total equity to see financial leverage.
Worked example
With these example inputs:
- Total assets$800,000
- Total equity$250,000
Financial leverage: 3.20
- The other way round0.31
- As a percentage320.0%
- If the first figure were 10% higher3.52
Frequently asked questions
What is the financial leverage ratio?
It is total assets divided by total equity, also known as the equity multiplier. A value of 3 means assets are three times equity, with the rest funded by liabilities.
Is higher leverage bad?
Leverage magnifies both gains and losses. Moderate leverage can boost returns on equity, but a high ratio raises risk if earnings fall or rates rise.