- This topic has 3 replies, 2 voices, and was last updated 5 years ago by
.
Viewing 4 posts - 1 through 4 (of 4 total)
- Posts
HI
I have a question in multi choice questions chapter15 there was these question ” what is the effect of write off inventory on GEARING RATIO . the correct answer was ” INCREASE”. I CAN’T understand why increase ? could you help me?thanks a lot
Writing off inventory reduces the profit, which therefore reduces reserves and therefore reduces the total equity. Less equity means the gearing ratio increases.
Viewing 4 posts - 1 through 4 (of 4 total)
- The topic ‘gearing ratio’ is closed to new replies.