Financial gearing - example

How financial gearing
works
No
gearing
Average
gearing 1:1
High
gearing 1:2
Very High
gearing 1:3
    1 2 3 4
    EUR
Capital structure          
Share capital  
Loan capital (foreign capital)   -
Total capital   
   
Profits          
Operating profit  
Interest on
loan
% -
Earning before tax (EBT)
Income tax %
Net profit
Return on share
capital %
Times interes
earned
N/A 
           
Calculate financial gearing.
Clear all table.
Positive impact of financial gearing.
Negative impact of financial gearing.
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