Gearing Ratio

Gearing ratio measures total debt as a percentage of total assets or equity, indicating financial leverage and risk exposure of a property investment.

Calculation MethodFormula
Debt to assets(Total debt / Total assets) times 100
Debt to equity(Total debt / Total equity) times 100
Equity to assets(Total equity / Total assets) times 100
Net gearing((Debt minus cash) / Equity) times 100
Risk AssessmentGearing Level
ConservativeUnder 40% debt to assets
Moderate40% to 60% debt to assets
Aggressive60% to 75% debt to assets
High riskAbove 75% debt to assets

Related Terms

Leverage RatioLoan-to-Value (LTV)Debt YieldCapital Structure

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