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Sir in what circumstances can we include short term debt in calculation of financial gearing?
My BPP book says we can always except when using capital employed as denominater. But an MCQ in the Kaplan kit where we were using market values as the figures and formula to use was Prior charge capital/ equity didnt use short term debt.
It depends on the context of the question.
Short term debt is not relevant, unless it is the case that we intend to keep the short term debt for the long term. If so, then it is relevant.
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