Enter the return on equity (% or $) and the return on assets (% or $) into the Calculator. The calculator will evaluate the Leverage Index.

## Leverage Index Formula

LI = ROE / ROA * 100

Variables:

- LI is the Leverage Index (%)
- ROE is the return on equity (% or $)
- ROA is the return on assets (% or $)

To calculate Leverage Index, divide the return on equity by the return on assets, then multiply by 100.

## How to Calculate Leverage Index?

The following steps outline how to calculate the Leverage Index.

- First, determine the return on equity (% or $).
- Next, determine the return on assets (% or $).
- Next, gather the formula from above = LI = ROE / ROA * 100.
- Finally, calculate the Leverage Index.
- After inserting the variables and calculating the result, check your answer with the calculator above.

**Example Problem : **

Use the following variables as an example problem to test your knowledge.

return on equity (% or $) = 300

return on assets (% or $) = 400