Leverage Ratios Excel Model Template
Originally published: 02/10/2018 13:17
Last version published: 16/01/2019 09:07
Publication number: ELQ-93959-2
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Leverage Ratios Excel Model Template

This Excel template model efficiently calculates 5 common leverage ratios, with an accompanying video to illustrate.

This Leverage Ratio model template by CFI is a fantastically efficient Excel spreadsheet tool for calculating common leverage ratios.

Leverage ratios are types of financial ratios used to show the level of debt that a business may have against other accounts in its balance sheet, income statement, or cash flow statement. They are used to examine the value of equity in a business by scrutinising the overall debt figures.

This Leverage Ratio template used the 5 most common ratios for financial analysis. They are:
1. Debt-to-Assets Ratio = Total Debt / Total Assets
2. Debt-to-Equity Ratio = Total Debt / Total Equity
3. Debt-to-Capital Ratio = Total Debt / (Total Debt + Total Equity)
4. Debt-to-EBITDA Ratio = Total Debt / EBITDA ( Earnings Before Interest Taxes Depreciation & Amortization)
5. Asset-to-Equity Ratio = Total Assets / Total Equity

These ratios can be used to indicate how much a business is relying on money that is borrowed. Leverage can be both positive and negative, dependent on the situation that a firm finds itself in, namely whether it is profiting or in danger of default.

The accompanying video explains how the ratios are calculated and, more importantly, what they mean.

See CFI’s Channel for additional templates and resources.

This Best Practice includes
1 Excel Spreadsheet, 1 YouTube Video

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