Gearing Ratio - What figure on the bottom?

System

Hi all,

In my textbook, the gearing formula is given as:

Long-term debt / Equity + Long-term debt x 100%

However, in the June 05 paper in section 2, it asks for a gearing calculation and when you look at the answer it has just used:

Long-term debt / Equity x 100%

Does anyone know which one you're supposed to use?

Thanks

System

Re:Gearing Ratio - What figure on the bottom?

ive been taught - long term debt / (long term debt + equity)x 100

System

Re:Gearing Ratio - What figure on the bottom?

For Gearing we havbe been told

Loan Capital

---

Capital Employed

System

Re:Gearing Ratio - What figure on the bottom?

For gearing we were taught

Long Term Debt
Capital Employed

System

Re:Gearing Ratio - What figure on the bottom?

Basically I'm just wondering whether or not to include long term debt in the bottom figure as well?

(PS - Good luck 2moro everyone!)