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. 

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:

  1. First, determine the annual net income ($). 
    • The annual net income ($) is given as: 50,000.
  2. Next, determine the average long-term debt ($). 
    • The average long-term debt ($) is provided as: 375,000.
  3. 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 = ?