Leverage Ratio or Equity Multiplier

Leverage Ratio, another name is Equity Multiplier is calculated by Total Assets per unit or Dollar of stockholders' Equity.

It is calculated by Total Assets divided Equity or 1+debt equity ratio

Equity Multiplier :1) Total Assets/ Equity

                                2) 1+ debt equity ratio 

Debt-equity ratio: Total Debt/Total Equity

the equity multiplier is a way of examining how a company uses debt to finance its assets. A higher equity multiplier indicates higher financial leverage, which means the company is relying more on debt to finance its assets.