Search results
Results from the WOW.Com Content Network
Closely related to leveraging, the ratio is also known as risk, gearing or leverage. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book value ), but the ratio may also be calculated using market values for both, if the company's debt and equity are publicly traded , or using a ...
An entity's debt-to-equity funding is sometimes expressed as a ratio. For example, a gearing ratio of 1.5:1 means that for every $1 of equity the entity has $1.5 of debt. A high gearing ratio can create problems for: creditors, which bear the solvency risk of the company, and; revenue authorities, which are concerned about excessive interest ...
Various leverage or gearing ratios are closely watched by financial analysts to assess the amount of debt in a company's capital structure. [4] [5] The Miller and Modigliani theorem argues that the market value of a firm is unaffected by a change in its capital structure. This school of thought is generally viewed as a purely theoretical result ...
In finance, leverage, also known as gearing, is any technique involving borrowing funds to buy an investment. Financial leverage is named after a lever in physics, which amplifies a small input force into a greater output force, because successful leverage amplifies the smaller amounts of money needed for borrowing into large amounts of profit.
Winches and hoists are also an application of CVTs, especially for those adapting the transmission ratio to the resistant torque. Bicycles with CVT gearing have had limited commercial success, with one example providing a range of gearing equivalent to an eight-speed shifter. [51]
Worm-and-gear sets are a simple and compact way to achieve a high torque, low speed gear ratio. For example, helical gears are normally limited to gear ratios of less than 10:1 while worm-and-gear sets vary from 10:1 to 500:1. [45] A disadvantage is the potential for considerable sliding action, leading to low efficiency. [46]
Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project - rather than the balance sheets of its sponsors. The project is therefore only feasible when the project is capable of producing enough cash to cover all operating and debt-servicing expenses over the whole ...
For a corporation with a published balance sheet there are various ratios used to calculate a measure of liquidity. [1] These include the following: [2] The current ratio is the simplest measure and calculated by dividing the total current assets by the total current liabilities. A value of over 100% is normal in a non-banking corporation.