Which ratio is used to calculate gearing?

Name: Which ratio is used to calculate gearing?
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Question

Quizplus · Accepted Answer

The debt to equity ratio is used to calculate gearing, which measures the proportion of a company's financing that comes from debt versus equity. This ratio is calculated by dividing the company's total debt by its total equity. A higher ratio indicates that the company is more heavily reliant on debt financing, which can increase financial risk but also potentially generate higher returns.

Which Ratio Is Used to Calculate Gearing