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

Evaluate average duration of the production run, A manufacturing  company ...

A manufacturing  company  needs  2500 units  of a particular component every  year. The  company buys  it at the rate of Rs. 30 per  unit.  The order processing cost for this part

Strategy, Strategy A business characteristically invests considerable t...

Strategy A business characteristically invests considerable time and money in developing or creating its strategy. Employees, harried with day-to-day tasks, sometimes fail to s

What are the factors which led to the development of abc, What are the fact...

What are the factors which led to the development of ABC: 1) Traditional costing fails to capture cause and effect relationship 2) Traditional costing often fails to highlig

Advantages of participatory budgets, Advantages of participatory budgets ...

Advantages of participatory budgets Information from employees most recognizable with each unit’s needs and constraints is included. Knowledge spread amongst numerous lev

Definition of the mission and goals of the organization , Definition of the...

Definition of the Mission and Goals of the Organization Generally the organization has already established mission and aim statements. Though, it may be essential to redefine

Operating Decisions, 11.1 Process Solutions provides a computer-based docu...

11.1 Process Solutions provides a computer-based document processing service. The accountant has produced the following analysis. Standard Modified Advanced Sales quantity 1,000

accounts payable turnover ratio , Accounts Payable Turnover Ratio is a sh...

Accounts Payable Turnover Ratio is a short-term liquidity measure which is used to calculate the rate at which a company pays off its suppliers. Accounts payable turnover ratio is

ACCT II, 1. Common-size analysis of company''s income statement, Balance sh...

1. Common-size analysis of company''s income statement, Balance sheet 2. Horizontal analysis of company''s income and balance sheet : for the last two years for both 3.perform rati

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

Application of Information technology in respect of management information system

Explain term contribution - contribution margin analysis, Contribution marg...

Contribution margin Analysis Contribution Contribution is the  difference between sales and variable cost or marginal cost of sales . if may also be defined as the excess

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