Financial Leverage Index Calculator

The Financial Leverage Index measures how well a company is using its debt. The Financial Leverage Index compares two other financial performance ratios: Return on Equity and a modified version of Return on Assets.

If Financial Leverage Index increases over time:

An increasing Financial Leverage Index usually indicates the company is using its debt in a positive way, that as the company has taken on debt, the debt has been increasingly beneficial to the company.

If Financial Leverage Index decreases over time:

A decreasing Financial Leverage Index usually indicates the company is using its debt in a negative way, that as the company has taken on debt, the debt has been increasingly detrimental to the company.

If Financial Leverage Index stays the same over time:

An unchanged Financial Leverage Index usually indicates the way in which the company is using its debt has remained the same.