Gearing ratio

This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author

Posts
December 26, 2015 at 11:44 am #292755
azeeza247
Participant
- Topics: 14
- Replies: 14
Which equation should be used?
Capital gearing =( long term debt/ shareholder funds) *100%
Or
Capital gearing =( long term debt/ shareholder funds+long term debt) *100% ?
December 27, 2015 at 9:32 am #292778
John Moffat
Keymaster
- Topics: 57
- Replies: 54851
Both formulae are standard measures of gearing.

If it is asked in the exam then you will be told which way to measure it.
Author

Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.