Capital Gearing ratio

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Dear Friends,

                             Please write the formula and interpretation of Capital Gearing ratio.Normally it is Eqcap+ Resv/ Deb+ Loans, but in Ca Suggested for Final in valuation & Goodwill Formula is the reverse i,e Deb+ Loans/ Eq cap+ Resv

Explain it

Thanking you,

Swarup Datta

Replies (2)

Capital Gearing Ratio =

Equity Share Capital + Reserves and Surplus / Fixed Interest Bearing Funds like Long term loans, Debentures
 

I have seen both the formulas on different websites. A better explanation can be found here:

https://www.accountingformanagement.org/capital-gearing-ratio/

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