What does Gearing, Last Yr mean?
Also known as Net Gearing, this is a measure of a company's financial leverage calculated by dividing its net liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.
In this case, book value is used to measure a firm's debt and equity securities although, in reality, market value may be more realistic measure in taking into account current market conditions.
Stockopedia explains Gearing, Last Yr...
A high ratio usually indicates a higher degree of business risk because the company must meet principal and interest on its obligations. Potential creditors are reluctant to give financing to a company with a high debt position. However, the magnitude of debt depends on the type of business. For example, a bank may have a high debt ratio but its assets are generally liquid. A utility can afford a higher ratio than a manufacturer because its earnings are more stable.
