Financial Dictionary.

This is a browseable and searchable reference tool for terminology relating to UK-based personal finance and financial products.

You can browse alphabetically, or search for a specific term.

A B C D E F G H I J L M N O P Q R S T U V W Z

Gearing

Definition: In general term, this is a reference to the amount of debt with a company's balance sheet in proportion to its assets. When used in reference to Investment Trusts, this refers to the amount of outstanding loans in proportion to the value of the trust's investment holdings. Because Investment Trusts are quoted companies they can borrow for commercial purposes - i.e. to purchase more investments. If the purchased investments perform well, they can repay the loans AND benefit their shareholders. However, if the investments perform badly, this will have a significant impact on the share price, as not only has the value of underlying holdings fallen, but the loans still have to be repaid. The higher the gearing ratio of a Trust, the more volatile and high risk it is perceived to be.

Recent Financial Topics

Used cars are now selling almost twice as quickly as in 2023, in the strongest sign yet that the market's bounced back from last year's crash. Good condition models across the board are selling fast.

Used cars now selling almost twice as quickly as 2023
26/04/2024 12:55 PM

The FTSE 100 finished up 60.97 at 8139.83 - a new closing record high. It also hit a new intraday record of 8,146.79 earlier in the session.

BUSINESS LIVE: Anglo American snubs BHP bid; NatWest profits fall; Pearson English language boost
26/04/2024 12:12 PM

The cybersecurity company has received an offer from US private equity firm Thoma Bravo, which tried to snap up Darktrace two years ago until talks broke down.

UK cybersecurity star Darktrace agrees £4.3bn private equity takeover
26/04/2024 11:22 AM

Financial Dictionary. (function() { var po = document.createElement('script'); po.type = 'text/javascript'; po.async = true; po.src = 'https://apis.google.com/js/plusone.js'; var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(po, s); })();

Recent Financial Topics

Financial Dictionary.