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Can you tell how are they getting the gearing ratio in the suggested answers? For example for the current situation, I did Non-current Liabilites/Non-current liabilities+Equity which is 140,000/(140,000+171,000) and got 45.01% whereas they got 40.2%. Same goes with the rest of the 3 proposals where I am getting a different gearing ratio despite correct calculations of the profit, assets and everything else
What they have done is wrong, in the current situation they have divided non-current liabilities (140,000) by what they have called “total equity and capital” (348,000).
140/348 = 40.2%However 348,000 is not total equity plus capital because it is including current liabilities. What you have done is correct 🙂
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