Equity Gearing

Equity Gearing
A financial metric that shows the ratio of a company's equity to its debt, providing insights into how a company finances its operations and growth.
Gearing (Capital Gearing, Equity Gearing, Financial Gearing, Leverage)
Gearing refers to the relationship between funds provided to a company by ordinary shareholders and long-term funds with a fixed interest charge such as debentures and preference shares. High gearing implies higher fixed charges on debt, impacting investment risk and returns.

Accounting Terms Lexicon

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