What’s on the Gearing poster
The rule, 3 worked examples, and the mistake everyone makes.
- Gearing raises the volatility of returns to equity in both directions.
- Gearing = Debt ÷ (Debt + Equity) · Interest cover = PBIT ÷ Interest
- Profit rises 10% = Equity return rises more
- Profit falls 10% = Equity return falls more
- Interest cover below 2 = Usually a concern
- Common mistake: Reading high gearing as bad in itself → It depends on cash flow stabi…
Operating gearing does the same thing with fixed costs. High fixed costs and high debt together is a fragile combination.
Questions about the Gearing poster
- What’s on the Gearing poster?
- The rule, 3 worked examples, and the mistake everyone makes. Gearing raises the volatility of returns to equity in both directions.; Gearing = Debt ÷ (Debt + Equity) · Interest cover = PBIT ÷ Interest; Profit rises 10% = Equity return rises more; Profit falls 10% = Equity return falls more; Interest cover below 2 = Usually a concern; Common mistake: Reading high gearing as bad in itself → It depends on cash flow stabi…. Operating gearing does the same thing with fixed costs. High fixed costs and high debt together is a fragile combination.
- Who is the Gearing poster for?
- Gearing belongs to the Accounting & Finance section rather than to a school year, because business is not something one grade owns. Anyone learning corporate finance can pin it up — a beginner, a student mid-course, or someone revising years later.
- When should you use the Gearing poster?
- Leverage magnifies whatever happens. It does not change the direction. A wall chart earns its place by being glanceable from where the work is happening, so Gearing belongs on the wall where that business work actually happens, within glancing distance, rather than filed away.
- What other posters go with Gearing?
- Behavioural Finance, Capital Structure and CAPM sit alongside Gearing in the Accounting & Finance section. Printed together they make a wall rather than a single sheet, which is how a reference set actually gets used.Behavioural FinanceCapital StructureCAPM
- Is the Gearing poster free to download and print?
- Yes. Gearing downloads as a free PDF with no account, no email and no watermark, like everything else in the Accounting & Finance section. Print as many copies as you like for a home, a classroom, a library or a tutoring group; reselling the file is the only thing the licence rules out.Read the licence
- What size does the Gearing poster print at?
- Gearing is a vector PDF laid out for US Letter, and prints on A4 with Fit to page — the same file, no separate download. Because every mark on it is drawn rather than photographed, it stays sharp enlarged to A3, A2 or A1 at a copy shop. Colour carries emphasis only, so a greyscale print of Gearing loses nothing.Printing guide
Related posters
Charts that sit alongside Gearing on the same wall.
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