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Finance & capital structure

Debt & Leverage Ratios Calculator

Derive book equity, net interest-bearing debt and simplified leverage ratios. Keep nonpositive equity and EBITDA limitations explicit.

24 / CHECK BOOK LEVERAGE

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INPUT GROUP 01

Book balance sheet

INPUT GROUP 02

Comparable-period earnings

Check the assumptions before acting on a result.

Read the method and example

YOUR CALCULATION

Book leverage separates total liabilities from interest-bearing debt.

Derived book equity

$200,000.00

Liabilities / assets

60.00%

Interest debt / signed equity (times)

1

Net interest-bearing debt

$150,000.00

Net debt / EBITDA (times)

1.5

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How the debt & leverage ratios calculator works

Book equity = total assets − total liabilities. Liabilities/assets is displayed as a percentage, while interest-bearing debt/equity is a times multiple. Interest-bearing debt cannot exceed entered total liabilities, and cash cannot exceed assets.

Net debt = interest-bearing debt − cash and can be negative. Net debt/EBITDA is displayed only for positive EBITDA. Zero asset or equity denominators give dashes; negative equity is retained and can invert the sign of the debt/equity multiple.

Enter a consistent balance-sheet date and an explicitly defined earnings period. Leases, pensions, restricted cash, covenant EBITDA adjustments and market values are not inferred. These book-based ratios do not establish debt capacity or reproduce a lender covenant.

Worked example

Assets of 500,000 and liabilities of 300,000 give 200,000 book equity and 60% liabilities/assets. With 200,000 interest debt and 50,000 cash, net debt is 150,000. At 100,000 EBITDA, net debt/EBITDA is 1.5 times. Increasing debt to 250,000 raises that multiple to 2 times.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

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