imported>Doug Williamson |
imported>Doug Williamson |
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| 1.
| | ISO currency code for the Qatari riyal. |
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| ''Financial gearing'' measures the relative amount of debt in a firm's capital structure.
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| Gearing ratios can be calculated in several different ways, so consistency of approach is important.
| | ==See also== |
| | | * [[AED]] |
| Two essential bases to define are:
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| | | * [[Qatar]] |
| i. The use of book or market values.
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| ii. The use of Debt divided by Equity (D/E) or of Debt divided by Debt plus Equity = D/[D+E].
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| Historically, use of the D/E version of the measure was more common in the UK.
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| With respect to the Debt figure, practice varies in including or excluding certain items such as cash, short term borrowings, leases, pensions and other provisions.
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| Practitioners may also adjust the Equity figure, for example to exclude intangible assets.
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| 2.
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| ''Operational gearing'' relates to the operating costs of a business, and measures the relative proportions of fixed and variable operating costs.
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| 'Gearing up' refers to increasing the levels of financial or operation gearing - or both - within an organisation.
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| The intention of gearing up is to improve expected net results.
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| The consequence of gearing up is normally to increase risk.
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| Many financial disasters have been a consequence of gearing up (or leveraging) in this way in earlier periods.
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| == See also == | |
| * [[Debt equity ratio]] | |
| * [[Debt to equity ratio]]
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| * [[Intangible assets]]
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| * [[Leverage]]
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| * [[Leveraged]]
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| * [[Leveraged takeover]]
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| * [[Levered]] | |
| * [[Off-balance sheet finance]] | |
| * [[Ungeared]]
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| * [[Ungeared cash flow]]
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| ==Other links==
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| [http://www.treasurers.org/node/8012 Masterclass: Measuring financial risk, The Treasurer, July 2012]
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| [[Category:Capital_Structure]]
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