It is not the gearing % that is important in assessing an organization's long term solvency and financial stability, but the ability of each organization to generate operating cash inflows with which to pay the interest on borrowed money.

Question

Quizplus · Accepted Answer

The ability to generate operating cash inflows is crucial for paying interest and maintaining financial stability, while gearing % is just one indicator of financial leverage.

It Is Not the Gearing % That Is Important in Assessing