Leverage Ratio

(redirected from Financial Gearing)

Leverage Ratio

In risk analysis, any ratio that measures a company's leverage. One example of a gearing ratio is the long-term debt/capitalization ratio, which is calculated by taking the company's long-term debt and dividing it by its long-term debt added to its preferred and common stock. Another example is a simple debt-to-equity ratio, which is calculated by dividing total debt by total equity. Generally, companies with higher leverage as determined by a leverage ratio are thought to be more risky because they have more liabilities and less equity. A leverage ratio is also called a gearing ratio or an equity multiplier.
References in periodicals archive ?
By progressively adjusting its debt structure, the Group has been effectively controlling its financial gearing and debt level.
i) improve the Group's current financial gearing by repaying and/or converting the bridge loans granted by its main financial partners since late 2012;
He then shows people who are not economists or bookkeepers how to analyze and interpret a report's account of profitability, liquidity, financial gearing, shareholder interests, predicting corporate failure, using other information in company annual reports business valuations, and what financial statements do not reveal.
have half of the financial gearing and almost twice the operating margin of
This has driven some outstanding financial performance, allowing us to retire a significant proportion of the company's debt and reduce financial gearing.
The rating supports our solid operating margins, low financial gearing and conservative financial policy and will allow us to diversify our sources of funding.
It stressed the "well-publicised change in the availability of financing for commercial transactions" and pointed out that "the market's attitude towards financial gearing has changed significantly, especially against the backdrop of the uncertainty in the economy".
Although students who have studied financial accounting will know about financial gearing, which considers sources of long-term finance, they might not be so familiar with the concept of operational gearing.
It can also be a good way of spreading your financial gearing.
Based on our performance in 2011, we are now setting a new target to reduce financial gearing to below 60% within 12 months.
With the integration of ScottishPower and Energy East, IBERDROLA now expects to exceed euro 3 billion in net profit in 2008, maintaining financial gearing below 50%
Similarly, Citigroup said the proceeds from the sale and leaseback would reduce the firm's financial gearing to below 100 per cent and should allow Pendragon to make further acquisitions.