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Gearing

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Definition of 'Gearing'

A fundamental analysis ratio of a company's level of long-term debt compared to its equity capital. Gearing is expressed in percentage form.

Companies with high gearing - more long-term liabilities than shareholder equity - are considered speculative.

Also known as "financial leverage".
Investopedia Says

Investopedia explains 'Gearing'

In simpler terms, gearing explains how a company finances its operations - either through outside lenders or through shareholders.

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