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Which ratio indicates the proportion of fixed interest or dividend-bearing funds to non-fixed interest or dividend-bearing funds in the total capital employed?
  • a)
    Debt-equity ratio
  • b)
    Capital gearing ratio
  • c)
    Fixed assets ratio
  • d)
    Debt-service ratio
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Which ratio indicates the proportion of fixed interest or dividend-bea...
The capital gearing ratio indicates the proportion of fixed interest or dividend-bearing funds to non-fixed interest or dividend-bearing funds in the total capital employed. It compares fixed interest-bearing funds (such as long-term loans and debentures) to equity shareholders' funds. This ratio helps assess the financial structure of the company and whether it is operating on trading on equity.
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Which ratio indicates the proportion of fixed interest or dividend-bearing funds to non-fixed interest or dividend-bearing funds in the total capital employed?a)Debt-equity ratiob)Capital gearing ratioc)Fixed assets ratiod)Debt-service ratioCorrect answer is option 'B'. Can you explain this answer?
Question Description
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