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

Costs and benefits of factoring, Two types of costs concerned in factoring ...

Two types of costs concerned in factoring are as: 1) The service fee or factoring commission 2) The interest on advances granted through the factor to the firm. Factoring

What are the features of product life cycle costing, Features of product li...

Features of product life cycle costing Product life cycle costing is important due to the following features: 1) product life cycle costing involves tracing of costs and re

Adjusting entries, what do you debit and what do you credit in adjusting en...

what do you debit and what do you credit in adjusting entry for prepaid rent?

Gather data about alternatives, Gather Data about Alternatives When pot...

Gather Data about Alternatives When potential areas of activity are specified, management must assess the potential growth rate of the activities, the capability of the company

7. Alma and Associates, Alma and Associates, a new consulting service, rece...

Alma and Associates, a new consulting service, recently received a bill for repairs on its computers totaling $2,350. Alma thinks it may have been overcharged and is trying to recr

Financial management, discuss the applicability of an operating cycle in ve...

discuss the applicability of an operating cycle in vegetable growing in a low developed country like Uganda- Africa

Testing the slope, Testing the Slope The strong point of the relationsh...

Testing the Slope The strong point of the relationship among the dependent variable and each of the independent variables can be determined using 3 methods: 1) Correlation

C-v-p analysis – multiple products, C-V-P ANALYSIS – MULTIPLE PRODUCTS ...

C-V-P ANALYSIS – MULTIPLE PRODUCTS The simple product CVP analysis can be extended to handle the more realistic situations where the firm produces more than one product. The o

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