What is the 'Gearing Ratio'
The gearing ratio is a general term describing a financial ratio that compares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds.
Also known as the Net Gearing Ratio.
BREAKING DOWN 'Gearing Ratio'
The higher a company's degree of leverage, the more the company is considered risky. As for most ratios, an acceptable level is determined by its comparison to ratios of companies in the same industry. The best known examples of gearing ratios include the debttoequity ratio (total debt / total equity), times interest earned (EBIT / total interest), equity ratio (equity / assets), and debt ratio (total debt / total assets).
A company with high gearing (high leverage) is more vulnerable to downturns in the business cycle because the company must continue to service its debt regardless of how bad sales are. A greater proportion of equity provides a cushion and is seen as a measure of financial strength.

Gearing
The level of a company’s debt related to its equity capital, ... 
Capital Gearing
The degree to which a company acquires assets or to which it ... 
Leverage Ratio
Any ratio used to calculate the financial leverage of a company ... 
Capitalization Ratios
Indicators that measure the proportion of debt in a company’s ... 
Debt Ratio
A financial ratio that measures the extent of a company’s or ... 
LongTerm Debt To Capitalization ...
A ratio showing the financial leverage of a firm, calculated ...

Fundamental Analysis
What is the Gearing Ratio?
Gearing ratios are financial ratios that measure a company’s leverage. 
Fundamental Analysis
What is Gearing?
Gearing, also called leverage, is the degree to which a company’s operations are funded by lenders versus shareholders. 
Fundamental Analysis
What Is A Good Gearing Ratio?
Gearing ratios are useful for evaluating a company’s financial fitness through the figures found on its profit and loss statement. 
Investing Basics
How to Use the Gearing Ratio
The gearing ratio is a figure that compares a company’s owners’ equity to the amount of money the company has borrowed. 
Investing Basics
Understanding Leverage Ratios
Large amounts of debt can cause businesses to become less competitive and, in some cases, lead to default. To lower their risk, investors use a variety of leverage ratios  including the debt, ... 
Investing
Ratio Analysis
Ratio analysis is the use of quantitative analysis of financial information in a company’s financial statements. The analysis is done by comparing line items in a company’s financial ... 
Forex
The Debt To Equity Ratio
The debt to equity ratio identifies companies that are highly leveraged and therefore a higher risk for investors. Find out how this ratio is calculated and how you can use it to evaluate a stock. 
Investing Basics
Analyze Investments Quickly With Ratios
Make informed decisions about your investments with these easy equations. 
Investing
Total Debt to Total Assets
Total Debt to total assets, also called the debt ratio, is an accounting measurement that shows how much of a company’s assets are funded by borrowing. In business, borrowing is also called leverage. 
Trading Strategies
Financial Ratios to Spot Companies Headed for Bankruptcy
Obtain information about specific financial ratios investors should monitor to get early warnings about companies potentially headed for bankruptcy.

What is the difference between the gearing ratio and the debttoequity ratio?
Dive deeper into gearing ratios: what are they, how are they used and why the debt to equity ratio is one of the most popular ... Read Answer >> 
What is the difference between a capital gearing ratio and a net gearing ratio?
Understand the definition of gearing in the finance industry, the difference between net gearing and capital gearing ratios ... Read Answer >> 
What is considered to be a bad gearing ratio?
Understand the basics of gearing, including the net gearing ratio, what constitutes a bad gearing ratio and how this figure ... Read Answer >> 
What is the most widely used gearing ratio?
Understand the most commonly used gearing, or leverage, ratio used to evaluate a company's financial condition, the debt ... Read Answer >> 
Which financial ratio best reflects capital structure?
Learn about the debttoequity ratio and why this metric is widely considered the most useful reflection of a company's capital ... Read Answer >> 
What are financial risk ratios and how are they used to measure risk?
Explore some of the primary financial risk ratios that investors and analysts commonly use to evaluate a company's overall ... Read Answer >>