Category: Finance Basics

gearing

What Is Gearing? A Simple Definition

Gearing is a popular word in the financial world. It is a synonym of ‘financial leverage’ and both of these words can be used interchangeably. This is a ratio between the amount of own and the amount of borrowed capital in a business, personal budget or any other financial unit. To learn more about leverage...

What Is Financial Leverage? The Basics For Dummies

What Is Financial Leverage? The Basics For Dummies

Financial leverage in simple words is simply a way for achieving bigger results with the relatively small amount of capital/financial resources. This is usually possible with the help of credit, but leverage could also be achieved with the help of some financial instruments like derivatives. In the most common case, borrowing against the initial amount...