Credit Management Gearing - Help please!

Hello!

This is my first time posting in here... usually I can find the answers I need already discussed but as I am asking about a AQ2016 sample assessment I don't think anyone has asked yet.

Wondering if anybody could help with credit management CDMT Sample Assessment 1

On task 2, ratio analysis it has asked for gearing (gearing = total debt/debt + equity)

So we are given various figures but essentially the ones I need are:

Non current liabilities (borrowing) = £2000
Total Equity = £1964

So to me it would be
2000/2000+1964 x 100% = 50.45

Now the answers say it should be 51.79

Am I missing something?

Sorry if it is something really obvious... not sure how to copy the rest of the question across as maybe it is the other figures I am missing.

If someone could help it would be much appreciated as my exam is Thursday!!

Thanks in advance
Lucy

Comments

  • N4T
    N4T AAT Student Posts: 191
    Total debt is long and short term debt. You need to include the loan of £110 under current liabilities to the equation.
    lucym96
  • lucym96
    lucym96 Registered Posts: 24
    Sorry definitely missed that - lesson learnt ha!

    Thank you :)
  • Mike Webster
    Mike Webster Registered, Tutor Posts: 203 Dedicated contributor ? ? ?
    Total debt is any interest bearing debt (short & long term loans, overdrafts)
    Michael JH Webster AATQB FMAAT
  • lucym96
    lucym96 Registered Posts: 24
    Thank you - I was only included long term loans and not the short term!

    Silly mistake.
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