Gearing Class
The term "Gearing Class" refers to a classification system used in finance and investment to measure a company's financial leverage. It indicates the ratio of a company's debt to its equity, helping investors understand how much of the company's operations are funded by borrowed money versus shareholders' funds. A higher gearing ratio suggests greater financial risk, as the company relies more on debt.
In the context of business, companies are often categorized into different gearing classes based on their ratios. This classification helps investors assess the risk associated with investing in a particular company, guiding their decisions on whether to buy, hold, or sell shares.