Two Types of Gearing ratios? (1 Viewer)

[aaron22]

Hey whats the correct ratio formula for gearing.

in many sources the says its = TOTAL liabilities / OE


But some say its = NON CURRENT liabilities / OE


which one is correct?

 

[sir-study-alot]

total

 

[phoebeee]

I though gearing was just TL/OE..... That's under solvency.

 

[lyounamu]

just one...in terms of syllabus

gearing refers to relative amount of debt to OE.

 

[BUSINESSKING]

There is only one ratio, grunt.

Debt/Equity, Solvency, Gearing, Leverage all have the same meaning;

Total Liabilities/Owner's Equity

 

[00iCon]

There is only one ratio, grunt.

Debt/Equity, Solvency, Gearing, Leverage all have the same meaning;

Total Liabilities/Owner's Equity

Theres only onme IN THE SYLLABUS! But have you heard of the Quick ratio and the Times interest earned ratio?

 

[Eddykungfu]

we don't need quick ratio for liquidity or times interest for hsc syllabus.

 

[00iCon]

we don't need quick ratio for liquidity or times interest for hsc syllabus.

I know, i was just pointing out that BUSINESSKING is not the king of Business, but rather of Business Studies, which is a watered down version of real life business.

 

[L]

gearing your head

 

[- Alex -]

Its teh first one

TL/OE = Gearing