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Hello Mr Moffat,
Kindly clarify whether below items are included in the gearing ratio
1. Deferred revenue
2. Deferred credits
3. Derivative financial instruments
4. Provisions5. Borrowings classified under current liability it includes Bonds Term loans,Lease liabilities and Bank overdrafts
6. Trade and other payable, classified under current liability however they account a significant portion.My apologies for a lengthy question.
Thanks
Soud SaeedFor Paper P4, gearing is almost always measured using the market values of debt and equity (not the balance sheet values).
The market value of equity is simply the number of share multiplied by the market value per share. For debt, you should include all long-term borrowings – i.e. non current liabilities. The only item classified as a current liability that could be included is bank overdraft if it was intended to be there in the long-term.Just a quick question Mr Moffat,
Is it compulsory for a government owned company lets say like Emirates Airline to have shares?
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