Gearing

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:09AM in AAT student discussion
Hi<BR><BR>Can someone confirm how exactly you calculate a debt / equity gearing ratio?<BR>It appears there are so many ways to calculate it I get different figures each method i use!!!!

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Gearing

    gearing can be calculated by two methods<BR>debt / equity<BR>and<BR>debt / capital employed<BR><BR>both methods give different answers<BR><BR>remember to add preference shares in debt ( long term loans + preference share capital)<BR><BR>capital employed ordinary share capital + reserves + preference share capital + long term loans<BR><BR>equity = ordinary share capital + reserves<BR>hope this helps
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Gearing

    thanks a million

Categories

Privacy Policy