Gearing

renae
renae Feels At HomeRegistered Posts: 76
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

Comments

  • shama72
    shama72 New Member Registered Posts: 8
    Hi

    The Gearing ratio in PEV June 08

    12000/12000+8400X100=58.82%

    OR

    12000/8400=1.428

    I hope this helps
  • Khurram Taj
    Khurram Taj Feels At Home Registered Posts: 29
    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
    renae Feels At Home Registered Posts: 76
    thanks to both, I finallly get it! Well, thats 2% of the paper covered!
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