Income Gearing

Income Gearing

Interest Paid (Total Paid Less Capitalised) X 100

Net Profit B.T. + Interest Paid (Total Paid Less Capitalised)

 

Benchmark: 10-15%

Interest paid on borrowings as a percentage of pre-interest profit.

Shows how much of the company’s profit goes towards serving its debt (see gearing), giving an indication of how well the company is meeting its debt requirements/how credit worthy it is (the lower the better).