20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

gearing ratio(debt:Equity)

This topic has 3 replies, 3 voices, and was last updated 8 years ago by mrjonbain.

Viewing 4 posts - 1 through 4 (of 4 total)

Author
Posts
February 1, 2017 at 7:20 pm #370643
reosarogi
Member
- Topics: 5
- Replies: 2
If a question says gearing ratio(debt:equity) is 0.6 does it mean debt is 60 and equity is 40 or debt is 60 and equity is 100
February 2, 2017 at 7:41 am #370712
John Moffat
Keymaster
- Topics: 57
- Replies: 54701
Debt 60 and equity 100 (otherwise debt/equity does not equal 0.6 !!!)
February 2, 2017 at 4:19 pm #370787
reosarogi
Member
- Topics: 5
- Replies: 2
thanks
February 2, 2017 at 6:42 pm #370823
mrjonbain
Moderator
- Topics: 6
- Replies: 2487
Good example of how ratio analysis generally doesn’t involve ratios.In above case ratio debt to equity would be 3:2.
Author
Posts

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic.