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In risk analysis, any ratio that measures a company's leverage. One example of a gearing ratio is the long-term debt/capitalization ratio, which is calculated by taking the company's long-term debt and dividing it by its long-term debt added to its preferred and common stock.
In 1999, entertainment conglomerate Walt Disney DIS had a financial-leverage ratio of 2.1, meaning that for every dollar in equity, the firm had $2.10 in total assets. (It borrowed the other $1.10.) A financial-leverage ratio of 2.1 is fairly conservative.