Financial Ratio
Relationship between financial figures measuring performance/position.
Real World
During its 2008 near-collapse, HBOS had a gearing ratio exceeding 40:1 — a leverage ratio that, had analysts flagged it earlier, would have signalled unsustainable risk long before the crisis hit.
Exam Focus
State the ratio value, compare it to a benchmark or prior year, then explain the business implication — three steps for full marks.
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