Why are some companies high-geared, and others low-geared? Each member of the group should examine the statements
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Why are some companies high-geared, and others low-geared?
Each member of the group should examine the statements of financial position of a number of companies, probably in different sectors. It may be easiest to do this using the companies’ websites.
The group should agree the way in which gearing should be measured (e.g. is short-term borrowing to be included with longterm borrowing?). Are utility companies more highly geared than retailers? Are breweries more highly geared than oil companies?
Can you identify what factors seem to be associated with high gearing and low gearing?
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