Enter the total EBIT and EBIT minus interest into the calculator. The calculator will evaluate and display the financial leverage.

## Financial Leverage Formula

The following equation can be used to calculate the financial leverage of a company.

FL = EBIT / (EBT)

- Where FL is financial leverage
- EBIT is the earnings before interest and tax
- EBT is the earning before tax only

## What is Financial Leverage?

Financial leverage is a metric that describes how well a company is performing relative to it’s interest earnings. In other words, the ratio of EBIT to EBT.

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