Gearing

renae

Hi,

Can anyone tell me the figures used in the gearing calculation in the pev june 08 exam?
Having missed most of college this year I am trying to teach myself the course and can't seem to get my head around it.
I know the formula but if someone could let me know the figures used to get to the answer then that would be great x

shama72

Hi

The Gearing ratio in PEV June 08

12000/12000+8400X100=58.82%

OR

12000/8400=1.428

I hope this helps

Khurram Taj

Hi

The standard formula is :

Gearing = Loans/loans+equity capital

12000/12000+8400X100=58.82%

if the gearing figure is more than 60%, it is generally reported high; 100% is very high.

Less than 20% could be taken as low. but in all cases it depends upon the prevailing circumstances at the time and what point of comparison is.

renae

thanks to both, I finallly get it! Well, thats 2% of the paper covered!