Alevel Business Ratio

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anonymousayyyy
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#1
Report Thread starter 1 year ago
#1
A business has non-current liabilities of £200 000 and a gearing ratio of 40%. It then takes
out a long-term loan of £100 000 from the bank.

Calculate its new gearing ratio after taking out this bank loan.

Please can someone help me?

The formula for gearing (%) = non-current liabilities/ total equity + non-current liabilities x 100 --- however, I'm not sure the formula is correct for this Q.

Perhaps... --> Debt/ equity ratio: Debt/ equity x 100
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