How to increase gearing ratio?

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550 viewsApril 21, 2013Corporate Finance

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Peavler December 2, 2012 0 Comments

It can be a simple thing but how can a company increase it’s gearing ratio and what will it mean? Is it bad or good to increase the gearing ratio?

score 0 · Answer 1 · 2013-04-21T09:31:51+00:00

Just to add that the external debt can be increased by additional bank loans or by issuing bonds.

The capital can be decreased if the company for example buys back some of it’s shares (repurchase) and then cancels these shares.