Could you also explian (in simple terms please!) what Liquid Ratios is.
Thanks so much for your answers.
2006-10-16 17:13:40 · 1 answers · asked by Mrs D 6 in Business & Finance ➔ Other - Business & Finance
GEARING RATIO = Loan Capital / Capital Employed
In simple terms, it is a measure of debt as a percentage of shareholders' equity. Shareholders' equity is the total of proceeds from stock sales, plus retained earnings. It is also called the debt/equity ratio. It is one measure of a company's risk. If debt is relatively high, then they have to pay out a lot for debt service.
Liquid Ratio, also known as Quick Ratio or Current Ratio, is Current Assets divided by Current Liabilities. The idea here is to measure a company's ability to pay the bills coming due.
Best of success.
2006-10-17 06:55:10 · answer #1 · answered by Thinker 5 · 0⤊ 0⤋