Enter the current value of the leveraged position ($) and the initial amount invested before leverage ($) into the Return on Leverage Calculator. The calculator will evaluate and display the Return on Leverage.
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Return on Leverage Formula
The following formula is used to calculate the Return on Leverage.
ROL =(CV – IBL) / IBL * 100
- Where ROL is the Return on Leverage (%)
- CV is the current value of the leveraged position ($)
- IBL is the initial amount invested before leverage ($)
How to Calculate Return on Leverage?
The following example problems outline how to calculate Return on Leverage.
Example Problem #1:
- First, determine the current value of the leveraged position ($).
- The current value of leveraged position ($) is given as: 4,000.
- Next, determine the initial amount invested before leverage ($).
- The initial amount invested before leverage ($) is provided as: 2,000.
- Finally, calculate the Return on Leverage using the equation above:
ROL =(CV – IBL) / IBL * 100
The values given above are inserted into the equation below and the solution is calculated:
ROL =(4,000 – 2,000) / 2,000 * 100 = 100.00 (%)
Example Problem #2:
For this problem, the variables needed are provided below:
current value of leveraged position ($) = 6,000
initial amount invested before leverage ($) = 1,000
This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer.
ROL =(CV – IBL) / IBL * 100 = ?
