Enter the annual net income ($) and the average long-term debt ($) into the Return on Debt Calculator. The calculator will evaluate and display the Return on Debt.
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Return on Debt Formula
The following formula is used to calculate the Return on Debt.
ROD = ANI / ALD * 100
- Where ROD is the Return on Debt (%)
- ANI is the annual net income ($)
- ALD is the average long-term debt ($)
How to Calculate Return on Debt?
The following example problems outline how to calculate Return on Debt.
Example Problem #1:
- First, determine the annual net income ($).
- The annual net income ($) is given as: 50,000.
- Next, determine the average long-term debt ($).
- The average long-term debt ($) is provided as: 375,000.
- Finally, calculate the Return on Debt using the equation above:
ROD = ANI / ALD * 100
The values given above are inserted into the equation below and the solution is calculated:
ROD = 50,000 / 375,000 * 100 = 13.33 (%)
Example Problem #2:
For this problem, the variables needed are provided below:
annual net income ($) = 75,000
average long-term debt ($) = 1,000,000
This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer.
ROD = ANI / ALD * 100 = ?
