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Old 19 Oct 2009, 12:54 PM   #1 (permalink)
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Two Types of Gearing ratios?

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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?
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Old 19 Oct 2009, 12:56 PM   #2 (permalink)
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Re: Two Types of Gearing ratios?

total
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Old 19 Oct 2009, 12:57 PM   #3 (permalink)
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Re: Two Types of Gearing ratios?

I though gearing was just TL/OE..... That's under solvency.
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Old 19 Oct 2009, 1:00 PM   #4 (permalink)
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Re: Two Types of Gearing ratios?

just one...in terms of syllabus

gearing refers to relative amount of debt to OE.
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Old 19 Oct 2009, 4:12 PM   #5 (permalink)
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Re: Two Types of Gearing ratios?

There is only one ratio, grunt.

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

Total Liabilities/Owner's Equity
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Old 19 Oct 2009, 7:03 PM   #6 (permalink)
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Re: Two Types of Gearing ratios?

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Originally Posted by BUSINESSKING View Post
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?
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Old 19 Oct 2009, 7:16 PM   #7 (permalink)
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Re: Two Types of Gearing ratios?

we don't need quick ratio for liquidity or times interest for hsc syllabus.
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Old 19 Oct 2009, 7:26 PM   #8 (permalink)
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Re: Two Types of Gearing ratios?

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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.
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Old 19 Oct 2009, 7:37 PM   #9 (permalink)
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Re: Two Types of Gearing ratios?

gearing your head
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