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Question : Which of the following is the Capital Gearing Ratio?

Option 1: Profitability Ratio

Option 2: Activity Ratio

Option 3: Long-term Solvency Ratio

Option 4: None of the above


Team Careers360 5th Jan, 2024
Answer (1)
Team Careers360 16th Jan, 2024

Correct Answer: Long-term Solvency Ratio


Solution : A measure of both capital structure and long-term solvency is the capital gearing ratio. The company is referred to as high geared if the capital gearing ratio is larger than one.
Hence option 3 is the correct answer.

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