gearing ratio formula
MOHMEDSALIM PATEL
Registered Posts: 184 Dedicated contributor 🦉
will you please let me know how to work out gearing ratio.
i have lost my college hand out except gearing ratio i am fine.
i heard the formula for DFS and PEV is different is that true.
thank in advance
i have lost my college hand out except gearing ratio i am fine.
i heard the formula for DFS and PEV is different is that true.
thank in advance
0
Comments

long term liabilities/equity + long term liabilities )0

Yeah it's confusing! I have been taught long term liabilities/equity x 100 is the debt/equity ratio? In the PEV answers they have several different approaches so I guess any of them would be acceptable0

I find this formula the most simple to understand
long term loan/Fixed asset + Net Current Asset x 100
(Net current asset is Current Asset  Current Liability)0 
i dont think fixed assets come in to it :S
i always thought it was..... longtermliability/(LTL+net assets) X 1000 
It does as the net asset formula is fixed asset + current asset  current liabilities0

I've found in the search an answer from Sandy Hood about it, hope it helps!There are many gearing ratios
The one of the most common is the one Trace wrote
My advice, irrespective of the formula you use, spell out exactly what you have done
i.e. Ratio name....formula in words....working/calculation.....the ratio itself.....your interpretation0 
ops, it doesn't show properly! here the link! http://forums.aat.org.uk/showthread.php?t=209100
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