State the capital gearing ratio, Managerial Accounting

Assignment Help:

Capital gearing ratio

 The term capital gearing is used to describe the relation ship between equity share capital including reserves and surplus to preference share capital and other fixed interest bearing loans. If preference share capital and other fixed interest bearing loans exceed the equity share capital including reserves the firm is said to be highly geared. The firm is said to be in low gear if preference share capital and other fixed interest bearing loans are less equity capital and reserves.

Capital gearing ratio is very important leverages ratio. Gearing should be kept in such a way that the company is able to maintain a steady rate of dividend. High gearing ratio is not good for a new company or company in which future earning are uncertain.

 


Related Discussions:- State the capital gearing ratio

Explain the objectives of management accounting, Explain the Objectives of ...

Explain the Objectives of management accounting? 1. Planning and policy formulation: the object of management accounting is to supply necessary data to the management for fo

When to order-material control, When to order-Material control If deliv...

When to order-Material control If deliveries from suppliers normally take two weeks to arrive, then replenishment orders should be placed with them when the level of stocks rep

Inventory control decisions, INVENTORY CONTROL DECISIONS Factories, wor...

INVENTORY CONTROL DECISIONS Factories, workshops, engineering departments handle raw materials used in the manufacture of products. The main objectives in handling these materi

Engineering method-cost estimation method, Engineering method These met...

Engineering method These methods are based on the use of engineering analysis of technological relationship between inputs and outputs e.g. method studies and time and motion s

Calculate the net increase or decrease in monthly profit, Painter Ltd, whic...

Painter Ltd, which manufactures and sells a single product, is currently producing and selling 102,000 units per month, which represents 85% of its full capacity. Total monthly cos

Manufacturing cost, what are the different arguments against direct materia...

what are the different arguments against direct materials, direct labor, and factory overhead

Accounting profit, Accounting Profit is a company's sum total earnings, com...

Accounting Profit is a company's sum total earnings, computed according to Generally Accepted Accounting Principles (GAAP), and involves the explicit costs of operating business, l

Estimate the total fixed cost, Question:   (a) For a business annual sa...

Question:   (a) For a business annual sales are Rs 50,000 and variable expenses are Rs 35,000 and fixed expenses are Rs 25,000. The owner wants to earn at least Rs 5,000 as pro

Assignment, Application of Information technology in respect of management ...

Application of Information technology in respect of management information system

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd