⚖️ Leverage & Solvency Ratios Calculator
Enter total debt, equity and assets to get the debt-to-equity, debt, equity-multiplier and debt-to-capital ratios — each explained in terms of financial risk.
$2 of debt for every $1 of equity. A moderate reliance on debt — common, but check it against industry norms. Capital-intensive industries (utilities, banks) run much higher, so compare to peers.
Assets are 3× equity — every $1 of equity supports $3 of assets. Higher means more of the balance sheet is funded by debt (more leverage).
66.7% of assets are financed by debt. A high share of assets funded by debt — more vulnerable to rising rates or a downturn.
Debt makes up 66.7% of total capital (debt + equity). The company leans on debt for the majority of its capital.
Leverage (solvency) ratios show how much a company relies on debt versus owners’ money. Whether a level is risky depends heavily on the sector — utilities, telecom and banks run structurally high leverage — so compare to industry peers. Note: some sources use total liabilities for debt-to-equity, others only interest-bearing debt; enter whichever you mean. Educational information, not financial advice. 🔒 In your browser.
How the leverage & solvency ratios calculator works
Leverage (solvency) ratios show how much a company relies on borrowed money versus owners' capital, and how much risk that carries. From total debt, equity and assets the tool computes debt-to-equity (debt ÷ equity), the debt ratio (debt ÷ assets), the equity multiplier (assets ÷ equity) and debt-to-capital (debt ÷ (debt + equity)) — and interprets each.
Leverage is one of the most industry-dependent measures: utilities, telecoms and banks carry structurally high debt against stable cash flows, while tech and healthcare run low. So a debt-to-equity of 2 may be prudent in one sector and alarming in another — always compare to peers. Also note whether "debt" means total liabilities or only interest-bearing debt, as sources differ. Educational information, not financial advice.
Frequently asked questions
What is a good debt-to-equity ratio?
A common rule of thumb is 1 to 2 for many industries, with below 1 seen as conservative and above 2 as higher-risk. But it's strongly industry-dependent — capital-intensive sectors run much higher — so compare to peers rather than an absolute cutoff.
What does the debt ratio tell me?
What fraction of a company's assets are financed by debt (debt ÷ assets). Below about 0.5 is generally viewed as conservative; approaching 1 means the firm is heavily financed by debt and more exposed to rising rates or a downturn.
What is the equity multiplier?
Total assets ÷ shareholders' equity — a leverage gauge showing how many dollars of assets each dollar of equity supports. A multiplier of 2 means assets are twice equity (the rest funded by debt); higher means more leverage.
What is the difference between debt-to-equity and debt-to-capital?
Both measure leverage. Debt-to-equity compares debt to equity; debt-to-capital compares debt to total capital (debt + equity), so it's always between 0 and 1 and shows debt's share of the whole funding mix.
Is high leverage always bad?
No. Debt is cheaper than equity and can boost returns, and stable-cash-flow businesses safely carry a lot. It becomes dangerous when earnings can't reliably cover the interest — which is what the coverage ratios test. Educational information, not advice.
Educational information, not financial advice. These calculators use standard formulas with the figures you enter; results are illustrations, not guarantees. For decisions about your money, consult a qualified, regulated financial professional.