Enter the total amount of assets and the total amount of stockholder’s equity. The calculator will determine the equity multiplier.
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Equity Multiplier Formula
The following equation can be used to calculate an equity multiplier.
EM = A / SE
- Where EM is the equity multiplier
- A is the total assets
- SE is the stockholder’s equity
Equity Multiplier Definition
An equity multiplier is a measure of how the total assets of a company reflects on the total stockholder’s equity. In general a larger ratio will indicate either less stockholder’s equity or more total assets.
Equity Multiplier Example
How to calculate an equity multiplier?
- First, determine the total assets.
Determine the value of all of the assets of a company.
- Next, determine the total stock holder’s equity.
Calculate the total value of the stock holder’s equity.
- Finally, calculate the equity multiplier.
Calculate the equity multiplier with the equation above.
An equity multiplier is a measure of the ratio of the total asset value of a business and the total equity owned by the stockholders.