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What exactly is the 'Gearing Ratio' for this exam?

This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.

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February 21, 2018 at 3:55 pm #438253
thezadzzz
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I understand the formula is Long-term Liabilities/ Capital Employed. (CE=TA-CL)
However, some books specify that it is Debt/Debt +Equity
Whilst some say Debt/Equity.
February 22, 2018 at 7:56 am #438313
John Moffat
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They are both standard measures of gearing.
The examiner will specify which measure he wants if you are required to calculate gearing.
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