Leverage Ratio

(redirected from Gearing Ratios)

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 ?
This leads them to adopt a relatively conservative approach to their lending," he said, adding that typical loan-to-equity gearing ratios for these existing banks range between 2:1 and 5:1, meaning that for every dollar of equity they can lend between $2 and $5.
The strategy is understandable, the UNCTAD economist said, but the question is whether more can be done to raise gearing ratios without scaring off bond investors.
As at end-June 2015, Noble's gearing and net gearing ratios (with readily marketable inventory (RMI) adjustments) increased to a respective 0.
The emergence of funding and liquidity strains as well as continued pressure on the Group's financial profile (such that its MYR I-adjusted gearing and net gearing ratios stay elevated at above 0.
The rating is however, constrained by short track record, high gearing ratios, volatility in raw materials & finished goods prices and major dependence on fortunes of the steel industry.
Long term debt equity and overall gearing ratios were high as on Mar.
Gearing ratios have become more conservative across the Americas, particularly at the corporate borrowing level.
In particular there have been significant deteriorations in the profitability ratios and some of the gearing ratios.
50 billion over the next 1-2 years, translating into gearing ratios of 0.
The gearing ratios of the Company, GP Industries and GP Batteries were 0.
Jie Shi, Acting Chief Financial Officer of Qiao Xing, said, "CECT's outstanding balance sheet has enabled us to complete this acquisition without negatively impacting Qiao Xing's debt service and gearing ratios.
Consequently, Qantas is likely to undertake a range of refinancing and new borrowing in 1998, but, as with Air NZ, gearing ratios are not expected to alter significantly in the next two years, Standard & Poor's said.