Gearing

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Can someone tell me the correct formula to use for gearing:

Debt/Equity or Debt/Capital Employed?

I am starting to panic now, as there seem to be various ways to calculate this.

Help please!!! :(

Comments

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

    I think either is acceptable unless the question specifies which formula is to be used. Just make sure you make it clear which formula you are using.

    However the one I found easiest to remeber was:

    Debt/Capital Employed


    Hope this helps
    Michelle

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