How do I determin the accounting Gearing Ratio?
GEARING RATIO = Loan Capital / Capital Employed In simple terms, it is a measure of debt as a percentage of shareholders’ equity. Shareholders’ equity is the total of proceeds from stock sales, plus retained earnings. It is also called the debt/equity ratio. It is one measure of a company’s risk. If debt is relatively high, then they have to pay out a lot for debt service. Liquid Ratio, also known as Quick Ratio or Current Ratio, is Current Assets divided by Current Liabilities. The idea here is to measure a company’s ability to pay the bills coming due. Best of success.
