# Leverage Ratios or Solvency Ratio Calculation

# Leverage Ratios Calculator

An online Solvency Ratio calculator to assess the financial health of your business.

## Solvency Ratio Formula

Solvency Ratio = (Net Income + Depreciation) / (All Liabilities)

Net income: This is the company profit after tax.

Depreciation: This is the decrease in value of the company assets over time.

All liabilities: All long term plus , all short-term debts.

### Example

(in thousands) | Microsoft | |

Net Income | $2,000 | $9,000 |

Depreciation | $1,600 | $6,500 |

Net Income + Depreciation (A) | $3,600 | $15,500 |

Short-term Liabilities | $1,200 | $12,000 |

Long-term Liabilities | $13,000 | $6,000 |

All Liabilities (B) | $14,200 | $18,000 |

Solvency Ratio (A / B) | 25% | 86% |