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ADVFN HomeHelpFinancialsKey FiguresGross Gearing
Key Figures
  Market Capitalisation
  Shares in Issue
  Previous Close (price)
  Price Earnings Ratio (PE ratio)
  Dividend Cover
  Cash Flow PS
  Return on Equity (ROE)
  Operating Margin
  PE Growth (PEG) Factor
  EPS Growth Rate
  DPS Growth Rate
  Net Debt
  Gross Gearing
  Quick Assets
  Net Working Capital
  Intangibles/Fixed Assets
  Turnover PS
  Pre-Tax Profit PS
  Retained Profit PS
  Cash PS
  Net Cash PS

Gross Gearing

Gross Gearing ratio, is the Total Debt (short-term and long-term) as a percentage of the Total of Shareholders' funds and Debt funds. The calculation is the following:

= [(creditors,short + creditors,long + creditors,other + subordinated loans + insurance funds) / (ord cap,reserves + prefs,minorities + creditors,short + creditors,long + creditors,other + subordinated loans + insurance funds)] * 100


As currently, borrowing arrangements have become much more flexible, on certain cases companies tend to substitute Long-term loans with Short-term borrowings which they carry forward. This phenomenon is encountered in cases of stong expectations for lower interest rates in the economy. In such cases, a company might find preferable, instead of locking itself in a long-term obligation with an interest rate that might prove to be higher than the prevailing market rate in the near future, to use short-term debt as a part of its capital structure - and therefore take advantage of decreasing interest rates.

Therefore, Gearing ratios presented here incorporate into their calculation, not only Long-term Debt, but the total of Short-term and Long-term liabilities of a company.