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      Question

      Capital Gearing is a fraction of 

      A Preference Share Capital and Debentures to Equity Share Capital and Reserves and Surplus Correct Answer Incorrect Answer
      B Equity Share Capital and Reserves and Surplus to Preference Share Capital and Debentures Correct Answer Incorrect Answer
      C Equity Share Capital to Total Assets Correct Answer Incorrect Answer
      D Total Assets to long term debt Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Capital gearing ratio signifies how much equity capital (owners’ capital) is geared towards outside capital (which includes preference share capital also).

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