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What is the difference between gearing ratio and investment ratio ?

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Question added by Muhammad Fiaz , GROUP MANAGER ACCOUNTS, FINANCE AND TAX , SMPL Group of Companies
Date Posted: 2014/05/13
Divyesh Patel
by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town

Gearing ratio focuses on the capital structure of the business. It focuses on the long-term financial stability of a business and measures the proportion of assets invested in a business that are financed by long-term borrowing.

 

Investment ratio is the relationship of gains from investments (including realized capital gains) resulting from insurance operations to earned premiums.

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