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. 

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:

  1. First, determine the total amount of debt ($). 
    • The total amount of debt ($) is given as: 10,000.
  2. Next, determine the total value of assets, capital, or equity ($). 
    • The total value of assets, capital, or equity ($) is provided as: 20,000.
  3. 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 = ?