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- This topic has 5 replies, 2 voices, and was last updated 7 years ago by P2-D2.
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- October 19, 2016 at 6:39 pm #345031
non current liabilities include deffered tax, pension liabilities,finance leases and preference shares , will we include them in calculation of Gearing ? and will they be part of total capital employed?
and what about finance lease current portion and tax liability in current liability , will we take that in current ratio calculation?October 19, 2016 at 9:30 pm #345070Hi,
I wouldn’t worry about ratios too much at P2 level but to answer your question the gearing ratio is to do with debt and so will include any interest bearing debt. Therefore preference shares are finance leases would be included with both current and non-current amounts included too.
The current ratio includes all current liabilities, so both the finance lease and current tax are included.
Thanks
October 20, 2016 at 7:32 am #345104Thanks sir but what abt tax
October 22, 2016 at 10:37 pm #345634What do you mean? I’ve said that tax is included in the current ratio.
October 23, 2016 at 2:44 pm #345705i was asking about whether deffered tax, finance lease will be taken in long term liablities in gearing ratio in the numerator along with bank loans,preference shares etc
October 26, 2016 at 8:20 pm #346170Long term, Interest bearing debt instruments will go in the gearing ratio. So finance lease liability will but deferred tax won’t.
Thanks
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