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Hi John,
Just worked through your lecture for this question.In part (c) (ii) we are asked to calculate gearing, and the current gearing is zero?
Am I missing a trick? Gearing is Debt over Equity so surely current should be 5,200/17,000 which would be 30.6% ??
I note that your answer and ACCA’s answer states zero, but why?
Cant seem to spot it anywhere!!Thanks in advance
The 5200 is trade payables – they are not part of gearing.
Gearing is the level of long-term debt borrowing and currently there are no non-current liabilities.
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