Workbook Question 5.2 (Osbourne Books)

John_Clyne

Hi all, could someone please explain how to work out the Gearing Ratio % for the question above. Thanks in advance.

Emmalouise18

Gearing ratio is..

Debt x 100 / Debt + Equity.

Cannot see any question above though?

John_Clyne

Hi Emma, I was referring to the question in the title in the hope someone currently studying the module was using the same resource. Maybe I can post the question later

I'm sure my book describes the formula as:

(Debt / Debt + Equity) x 100

Perhaps its a typo by Osborne.

Fee2019

I have always used the (Debt / Debt + Equity) x 100 formula

Pian32

The 2 formulae are functionally the same the x 100 can go on the top of the fraction or after the whole thing.

You could even do:

(100/(Debt+Equity)) x Debt or (1/(Debt+Equity)) x Debt x 100

Unfortunatly I don't have my osborne books on hand at work anymore so can't see the question.


I will add that written convention would have it as

(Debt/(Debt+Equity)) x 100

This is simply because the x 100 just converts the decimal ratio to a percentage

Emmalouise18

John_Clyne said:

Hi Emma, I was referring to the question in the title in the hope someone currently studying the module was using the same resource. Maybe I can post the question later

I'm sure my book describes the formula as:

(Debt / Debt + Equity) x 100

Perhaps its a typo by Osborne.

Hi John,

Sorry but I don't have the text book so unsure of the exact question. I believe both formulas work but I always used debt x 100 / debt + equity.

Thank you

Winani

those are the figures @Emmalouise18

Winani

those are the figures @Emmalouise18

Winani

those are the figures @Emmalouise18

Winani

the file wont upload i dont know why @Emmalouise18

Vero55

> @John_Clyne said:
> Hi all, could someone please explain how to work out the Gearing Ratio % for the question above. Thanks in advance.

Hey did you ever find out the answer to this? I'm stuck on the exact same question and I can't understand how they've worked it out?

hphil

Did anyone ever get the answer to this? Stuck on the same thing!