Gearing Ratio
fpettifer
Registered Posts: 40 Regular contributor ⭐
Hi,
Need a little help with gearing ratios please? Can't figure out how they've got that answer in PEV June 2007 exam?!!?
The FTC book didn't have a calculation for this in it, however found one in the Unit 15 pocket notes book (really helpful!) but can't get the figures they've got.
Thanks
F. :confused1:
Need a little help with gearing ratios please? Can't figure out how they've got that answer in PEV June 2007 exam?!!?
The FTC book didn't have a calculation for this in it, however found one in the Unit 15 pocket notes book (really helpful!) but can't get the figures they've got.
Thanks
F. :confused1:
0
Comments
-
The gearing ratio in PEV 07 is (for scenerio 1);
Long Term Borrowing / Net Assets x 100
so the answer is
754/971 x 100 = 77.65%
Hope this helps0 -
Hiya
we were just taught that it was debt/equity
I find that quite easy to remember!!0 -
there are two calculations for gearing
1 debt divide by equity
2 debt divide bt capital employed(debt + equity)
see the following excellent website
http://tutor2u.net/business/presentations/accounts/gearing/default.html0 -
I couldn't figure out how they got 43.71% in June 2007 exam?0
-
The fourmula that has been used is:
The debt divide by capital employed (debt+equity) times 100
therefore debt = 754
plus equity......= 971
total..............=1725
754/1725 x 100 = 43.71%0
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