Discover how to calculate free cash flow to equity to evaluate a firm's financial health, crucial for companies not paying dividends. Ideal for investment decisions.

Financial leverage—total assets divided by common shareholder’s equity—indicates the degree to which the firm has been financed through debt as opposed to equity sources.

The debt-to-equity calculation is fairly straightforward: Divide a company's total liabilities by shareholders' equity to calculate the debt-to-equity ratio.

Financial leverage—total assets divided by common shareholder’s equity—indicates the degree to which the firm has been financed through debt as opposed to equity sources.

* Tier 1 capital includes common stockholders' equity, noncumulative perpetual preferred stock, minority interests in consolidated subsidiaries, among other items.