Quiz: Gearing Ratio - Calculation and Interpretation
WJEC Eduqas GCE A LEVEL in BUSINESS specification
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Welcome! You've already studied key financial ratios like ROCE, current ratio, and acid test ratio. Today, we’ll focus on gearing ratio—its calculation and what it means for a business.
What does the gearing ratio measure?
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Which of the following are correct interpretations of a high gearing ratio? (Select all that apply)
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Gearing ratio is calculated as {{blank0}} divided by {{blank1}}.
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Match the items on the left with their correct pairs on the right
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A business has £200,000 in debt and £400,000 in equity. What is its gearing ratio?
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A gearing ratio of 70% suggests which of the following?
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Match the items on the left with their correct pairs on the right
Which of the following actions can reduce a business’s gearing ratio? (Select all that apply)
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Which type of business is likely to have a high gearing ratio?
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