REFS is
a mine of invaluable information for the private investor.
Selecting shares without its help is like trying to
clap with one hand tied behind your back.
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Net
gearing
Net gearing
is calculated by dividing net borrowings (i.e. gross borrowings
less cash and near-cash assets) by shareholders’ funds, and
expressing the result as a percentage. Near-cash assets are
defined below under the heading ‘Cash’.
Calculation:
TOTAL BORROWINGS,
LESS CASH & NEAR-CASH ASSETS
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X 100 = NET GEARING (%)
SHAREHOLDERS’
FUNDS
Separate
figures are calculated to show net gearing both before and after
deducting intangibles from shareholders’ funds. A minus sign
indicates nil net gearing and denotes a net cash position.
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