Financial Gearing

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Can anyone please help me with the above ratio, as I can never remember how to work it out!
Thanks

Comments

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

    I assume you mean gearing ratio ?

    long-term debt / ( Long term debts + Equity ) * 100%

    Alternatively

    (Long-term debt & pref share caps) / (shareholder funds & long-term debt and pref share capital) *100%

    Much easier to remember the first one though.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Financial Gearing

    thanks

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