gearing

= capital gearing; equity gearing; financial gearing; leverage
The relative size of the funds provided to a company by its ordinary shareholders and the long-term funds with a fixed interest charge, such as debentures and preference shares A company is said to be high geared when its fixed interest capital is dominant and low geared when its capital is predominantly in ordinary shares, especially in relation to other similar companies. A high-geared company is considered to be a speculative investment for the ordinary shareholder and will be expected to show good returns when the company is doing well. See also debt-equity ratio; financial distress

Big dictionary of business and management. 2014.

Look at other dictionaries:

  • Gearing — Gear ing, n. 1. Harness. [1913 Webster] 2. (Mach.) The parts by which motion imparted to one portion of an engine or machine is transmitted to another, considered collectively; as, the valve gearing of a locomotive engine; belt gearing; esp., a… …   The Collaborative International Dictionary of English

  • gearing — Also known as the debt/equity ratio or leverage. The ratio of debt (borrowings) to shareholder funds (broadly, share capital and retained profits), often expressed as a percentage or ratio. It is often used as a measure of the risk attached to a… …   Law dictionary

  • gearing — [gir′iŋ] n. 1. the act or manner of fitting a machine with gears 2. a system of gears or other parts for transmitting motion …   English World dictionary

  • gearing — the ratio between the business s debt and equity finance. Glossary of Business Terms financial leverage. Bloomberg Financial Dictionary Also known as leverage. Gearing describes the situation when an asset is controlled for a relatively low… …   Financial and business terms

  • Gearing — Financial leverage. The New York Times Financial Glossary * * * gearing gear‧ing [ˈgɪərɪŋ ǁ ˈgɪr ] also ˌcapital ˈgearing noun [uncountable] FINANCE the amount of borrowing that a company has in relation to its share capital. If the company makes …   Financial and business terms

  • gearing — [1] The combination or system of gears or sprockets designed to transmit power. [2] The ratio between the drive gear and the driven gear. also See alpine gearing crossover gearing double reduction gearing half step gearing wide step gearing wide… …   Dictionary of automotive terms

  • Gearing — Gear Gear (g[=e]r) v. t. [imp. & p. p. {Geared} (g[=e]rd); p. pr. & vb. n. {Gearing}.] 1. To dress; to put gear on; to harness. [1913 Webster] 2. (Mach.) To provide with gearing. [1913 Webster] 3. To adapt toward some specific purpose; as, they… …   The Collaborative International Dictionary of English

  • Gearing — A fundamental analysis ratio of a company s level of long term debt compared to its equity capital. Gearing is expressed in percentage form. Companies with high gearing more long term liabilities than shareholder equity are considered speculative …   Investment dictionary

  • gearing — capital gearing; = equity gearing; = financial gearing; = leverage The relationship between the funds provided to a company by ordinary share holders and the long term funds with a fixed interest charge, such as debentures and preference shares.… …   Accounting dictionary

  • gearing — / gɪərɪŋ/ noun the act of borrowing money at fixed interest which is then used to produce more money than the interest paid COMMENT: High gearing (when a company is said to be ‘highly geared’) indicates that the level of borrowings is high when… …   Dictionary of banking and finance

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