Gearing refers to the ratio of a company's debt to its equity, indicating how much of the company's financing comes from borrowed funds versus shareholders' investments. A higher gearing ratio suggests that a company relies more on debt, which can increase financial risk, especially during economic downturns. Conversely, a lower gearing ratio indicates a more conservative approach, relying more on equity financing. In the context of vehicles, gearing also describes the relationship between the engine and the wheels, affecting speed and torque. Different gear ratios allow vehicles to optimize performance for various driving conditions, such as city driving or highway cruising.