--------gearing ------ (1 Viewer)

[imqt]

guys urgent question

in some hsc questions they ask for gearing ratio
which do you use? total liabilties over total asset or TL/OE ???
we learnt to use the first one generally and i dont known which one to use if you are asked to compare to industry standard if they dont specifiy a specific ratio? you could end up comparing different rations than

 

[Roga]

guys urgent question

in some hsc questions they ask for gearing ratio
which do you use? total liabilties over total asset or TL/OE ???
we learnt to use the first one generally and i dont known which one to use if you are asked to compare to industry standard if they dont specifiy a specific ratio? you could end up comparing different rations than

The gearing ratio is Long-term debt/Shareholder's equity. I think what you're talking about is Current Assets/Current Liabilities? Which is the current ratio.

 

[samwell]

The gearing ratio is Long-term debt/Shareholder's equity. I think what you're talking about is Current Assets/Current Liabilities? Which is the current ratio.

There are actually two types of gearing ratios: Debt to Equity and Debt to asset ratio
DEpending on the question u can use either

 

[Heiday]

I would use

the Solvent Total Liabilities / Owners Equity.

 

[imqt]

thxs 4 the replies

yeh there are two
to stay safe than i will use the TL/0E

 

[Juliaan]

So many gearing questions,

though it is Gearing = Total Liabilities / Owners Equity