Enter the total amount of debt ($) and the total value of assets, capital, or equity ($) into the Leverage Ratio Calculator. The calculator will evaluate and display the Leverage Ratio.
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Leverage Ratio Formula
The following formula is used to calculate the Leverage Ratio.
LR = D / AV
- Where LR is the Leverage Ratio ($/$)
- D is the total amount of debt ($)
- AV is the total value of assets, capital, or equity ($)
How to Calculate Leverage Ratio?
The following example problems outline how to calculate Leverage Ratio.
Example Problem #1:
- First, determine the total amount of debt ($).
- The total amount of debt ($) is given as: 10,000.
- Next, determine the total value of assets, capital, or equity ($).
- The total value of assets, capital, or equity ($) is provided as: 20,000.
- Finally, calculate the Leverage Ratio using the equation above:
LR = D / AV
The values given above are inserted into the equation below and the solution is calculated:
LR = 10,000 / 20,000 = .50 ($/$)
Example Problem #2:
For this problem, the variables required are provided below:
total amount of debt ($) = 13,000
total value of assets, capital, or equity ($) = 30,000
Test your knowledge using the equation and check your answer with the calculator above.
LR = D / AV = ?
