The following items have been taken from the Balance Sheets of two public limited

companies, Henkel and Evonic, which are giants and fierce competitors in the microchip

manufacturing industry. Both have identical capitalisation of $651$ million.

a$.$ Calculate gearing for Henkel and Evonic; make sure to show the full formula $($either the

short version or long version$)$ for gearing together with your calculations.

b$.$ Define "Gearing" and then advise the company with the highest gearing on how it can

lower its gearing position.

c$.$ Why would this company want to lower its gearing position?

d$.$ Make inter$-$firm comparisons based on your findings on gearing percentages and nothing

else, which of the two companies carries a low risk for ordinary shareholders?