Friday, 12 May 2017

Ratio Analysis 2 Gearing


Gearing:

Non-current liabilities x 100
Capital Employed

Non current liabilities = long term loans.

Capital employed (if not stated clearly) = Non current liabilities + Total equity.


or  share capital + retained earnings + long-term liabilities.




The result of the gearing ratio give a % result.

Do you know what being 'highly geared' means?

More details here.