ILO:
a) Calculate:
o Gearing ratio
o Return on capital employed (ROCE)
b) Interpret ratios to make business decisions
c) The limitations of ratio analysis
a) Calculate:
o Gearing ratio
o Return on capital employed (ROCE)
b) Interpret ratios to make business decisions
c) The limitations of ratio analysis
GearingWhat are the benefits of using loans as a source of finance?
What drawbacks exist? Consider the following formula, what do you believe gearing is showing you? Non-current liabilities x 100% Capital employed What would be a good answer and why? What would possible be a bad answer and why? |
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