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This is usually taken as a good sign (positive) of the financial health of the company, put simply it means the company assets exceed liabilities.
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∙ 13y ago
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What is gearing ratio and its importance?
gearing is where a company analyses its financial expenditure on its operations
How do you improve gearing ratio of a company?
reducing liabilities or to increase the input of equity funds, to have a less risky gearing ratio. This will contribute to the long term stability of the business.
It has been said thatthe company can either protect its networth or its gearing ratio but not both from flactuating exchange rates comment on the above giving reasons?
please help, what is net worth or gearing ratio of a company
How does a company lower their gearing ratio?
Easiest way is to make a Rights issue of shares.
Can a company protect both its gearing ratio and net worth from fluctuations in exchange rates?
Yes it can. How?? I don't know
How do you calculate gearing?
Add up all of the short term debt and long term debt to find your total amount of debt. Add up all of your equity. Divide the total debt by the total equity. The number you get is the gearing ratio.
What is a 'see through gearing ratio?
The see through gearing ratio is a gears that spin. There are gears in almost everything that chines and spins like cars, transmissions and VCR's.
Importance of the paid-up capital?
The paid up capital shows the strength of the company internally. As the paid up capital is usually internally generated and not borrowed a higher paid up shows the strength of the company from the inside- the shareholders contribution as against a company with high external borrowing - that shows higher gearing and risk. Thus, in short a company with lower gearing is much more safe and stable in the long run compared to a company with a higher gearing ratio
Should non controlling interest be included in the gearing ratio?
Yes!
Can a profit margin ratio be negative?
A profit margin can be negative if the company had a negative net income. For eample if the company had $100,000 in net sales, but their net income was ($10,000) then (10,000)/100,000 = (10%) or negative 10%.
Capital gearing ratio?
Gearing Ratio = Long Terms Loan/ Capital employed *100 The Higher the ratio the more the business is exposed to interest rate fluctuations and to having topay back interest and loans before being able to re-invest earnings.
How do you calculate swap ratio?
Swap ratio is the ratio in which an acquiring company will offer its own shares in exchange for the target company's shares during a merger or acquisition. To calculate the swap ratio, companies analyze financial ratios such as book value, earnings per share, profits after tax and dividends paid, as well as other factors.
