Formula reference—Gearing ratio

A gearing formula may use long-term loans ÷ capital employed × 100 or another syllabus-defined basis. Write the exact definition before substituting values and label the result.

Different definitions produce different percentages, so comparisons require the same formula, date and accounting basis.

If long-term debt is 60 and capital employed 200, the stated definition gives 30%; changing the denominator to equity would answer a different question.

A ratio is not self-explanatory: formula, period and denominator must accompany interpretation.