{"id":11654,"date":"2024-08-20T09:31:28","date_gmt":"2024-08-20T13:31:28","guid":{"rendered":"https:\/\/www.sage.com\/en-ca\/blog\/?p=11654"},"modified":"2026-01-15T11:22:01","modified_gmt":"2026-01-15T16:22:01","slug":"what-is-the-gearing-ratio","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ca\/blog\/what-is-the-gearing-ratio\/","title":{"rendered":"What is the gearing ratio?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is the gearing ratio?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \">Published <time class=\"entry-date published\" datetime=\"2024-08-20T09:31:28-04:00\">August 20, 2024<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is the gearing ratio?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-ca\/blog\/what-is-the-gearing-ratio\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-ca\/blog\/author\/yassirmalik\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/03\/Yassir-Malik.jpg\" class=\"entry-author__image\" alt=\"yassir-malik-profile-picture\" \/>\t\t\t\t<span class=\"entry-author__name\">Yassir Malik<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Discover how the gearing ratio affects the ability of your small business to secure funding, investment, and manage debt.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Financing your business can feel a little like balancing spinning plates.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Picture a circus performer operating at the peak of their powers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whenever they\u2019re intently focused on balancing 1 spinning plate, even for a split second too long, they run the risk of another plate crashing unceremoniously to the ground.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But when they dedicate equal time to balancing each spinning plate, they\u2019re home and dry (and their trusty plates thank them for it).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Likewise, when you keep close tabs on your company\u2019s debt and equity levels, you\u2019re committed to keeping something called the gearing ratio intact, whether you realize it or not.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this article, we walk you through what gearing is and what it\u2019s used for, how gearing is calculated and interpreted and how your business can reduce it\u2014increasing your company\u2019s stability, flexibility, and financial health.<\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-is-gearing-and-what-is-it-used-for\" data-level=\"2\">What is gearing and what is it used for?<\/a><\/li><li><a href=\"#h-how-to-calculate-the-gearing-ratio\" data-level=\"2\">How to calculate the gearing ratio<\/a><\/li><li><a href=\"#h-how-to-interpret-the-gearing-ratio\" data-level=\"2\">How to interpret the gearing ratio<\/a><\/li><li><a href=\"#h-how-to-use-the-gearing-ratio-an-example\" data-level=\"2\">How to use the gearing ratio: An example<\/a><\/li><li><a href=\"#h-how-to-reduce-the-gearing-ratio\" data-level=\"2\">How to reduce the gearing ratio<\/a><\/li><li><a href=\"#h-final-thoughts\" data-level=\"2\">Final thoughts<\/a><\/li><\/ul><\/div>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Small Business Survival Toolkit<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>A practical guide with easy to use templates to help your new business start, survive and thrive.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-f83d0c91-0a6f-44a6-bc16-55083b9084df\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Get your Small Business Survival Toolkit<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t<div class=\"single-cta__downloads\">\n\t\t\t\t\t\n\t\t\t\t\t7,066 readers have downloaded this guide\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2019\/01\/GettyImages-610436768_super-1064x810.jpg\" class=\"single-cta__image\" alt=\"People sitting at desks in a large office\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2019\/01\/GettyImages-610436768_super-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-gearing-and-what-is-it-used-for\">What is gearing and what is it used for?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Gearing measures a company\u2019s financial leverage\u2014that is, the proportion of its business funded by borrowed money (debt financing) versus the owner(s) investment or retained earnings (equity financing).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Gearing is a useful metric for lenders, investors, and small business owners alike.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It provides insights into a company\u2019s risk level, which help lenders assess a borrower\u2019s ability to repay debt.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Gearing also helps investors determine whether to invest in a particular company (or not touch it with a 10-foot pole).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And small business owners can use it to analyse their cash flow and decide if they need to reduce their borrowing.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-calculate-the-gearing-ratio\">How to calculate the gearing ratio<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">There are a number of ways to work out your gearing, but here are the 3 most commonly used methods.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-1-debt-to-equity-ratio\"><strong>1. Debt-to-equity ratio<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The most popular formula is the debt-to-equity ratio, which shows how much debt your company uses to finance the business rather than using its own money.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Take your company\u2019s total debt\u2014short-term debt plus long-term debt\u2014then divide it by its shareholder equity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you prefer the debt-to-equity ratio as a percentage, multiply it by 100.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The formula looks like this:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-short-term-debt-long-term-debt-shareholder-equity\"><strong>(Short-term debt + long-term debt) \/ shareholder equity<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-2-debt-ratio\"><strong>2. Debt ratio<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Another popular formula is the debt ratio, which measures the proportion of your company\u2019s assets financed by debt.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Divide your company\u2019s total debt by its total assets.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Again, if you would like the debt ratio as a percentage, multiply it by 100.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s the equation:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-total-debt-total-assets\"><strong>Total debt \/ total assets<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-3-equity-ratio\"><strong>3. Equity ratio <\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">A third formula is the equity ratio, which is the proportion of your company\u2019s assets funded by equity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Divide your company\u2019s total equity by its total assets.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For an equity ratio expressed as a percentage, multiply it by 100.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is the calculation:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-total-equity-total-assets\"><strong>Total equity \/ total assets<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Regardless of the gearing formula you use, you\u2019ll get a good idea of how well your company will be able to satisfy its financial obligations during economic fluctuations.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-interpret-the-gearing-ratio\">How to interpret the gearing ratio<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">High gearing (above 0.5 or 50%) means your company has a lot of financial leverage, so it heavily relies on debt to pay for day-to-day operations, which is, quite literally, risky business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">During an economic downturn, your company may have difficulty maintaining its debt repayment schedule, which could, in turn, put it at risk of default and even insolvency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But not all companies with high gearing are created equal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, a company with high gearing operating in a capital-intensive sector, such as the car industry, or a regulated sector, such as utilities, isn\u2019t necessarily in poor financial shape because high gearing is typical in these industries.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Equally, companies with low gearing aren\u2019t created equal either.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although low gearing (below 0.25 or 25%) suggests a company is using more equity than debt to finance the business, it can also mean the company can\u2019t capitalize on debt financing to expand it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ideal gearing is between 0.25 (25%) and 0.50 (50%), which indicates a healthy balance between equity and debt financing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For a more complete picture of your company\u2019s financial condition, it\u2019s important to contextualize gearing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In other words, your company\u2019s ratio should be benchmarked against the ratios of other companies in the same industry.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Small Business Survival Toolkit<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>A practical guide with easy to use templates to help your new business start, survive and thrive.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-f83d0c91-0a6f-44a6-bc16-55083b9084df\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Get your Small Business Survival Toolkit<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t<div class=\"single-cta__downloads\">\n\t\t\t\t\t\n\t\t\t\t\t7,066 readers have downloaded this guide\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2019\/01\/GettyImages-610436768_super-1064x810.jpg\" class=\"single-cta__image\" alt=\"People sitting at desks in a large office\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2019\/01\/GettyImages-610436768_super-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-use-the-gearing-ratio-an-example\">How to use the gearing ratio: An example<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s look at how your small business can benefit from calculating its gearing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For the purposes of this illustration, we\u2019ll call your fledgling accountancy practice, A-Star Accounting (ASA).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Rumour has it that accountants are flocking in their droves to join ASA, so you\u2019re hellbent on opening a second location.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But you need more funds to hire staff, buy equipment and lease extra office space.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can either apply for debt financing, such as a bank loan, equity financing (investment), or both.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By calculating ASA\u2019s gearing, you evaluate the financial risk attached to securing more debt.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If it\u2019s high (above 0.5), which indicates heavy debt reliance, you might want to reconsider applying for a bank loan and consider the equity route instead.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But if gearing is less than 0.25, for example, this suggests ASA is less dependent on borrowing to finance the business, which makes taking on additional debt far less risky.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-reduce-the-gearing-ratio\">How to reduce the gearing ratio<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Larry Hartman, Chief Strategic Officer at <a href=\"https:\/\/www.pixelfreestudio.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">PixelFree Studio<\/a>, a software solution company, shares some first-hand experience of reducing his company\u2019s gearing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIn PixelFree\u2019s growth phase, we focused on equity financing to keep our gearing in a safe range,\u201d he says.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cExploring equity financing options, like getting investors onboard, can help your balance sheet without adding to your debt.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIt certainly helped us grow without taking on too much debt, which is important for long-term success, because it kept our finances stable.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Larry recommends companies reinvest profits in the business rather than take out more loans.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cTo do this, cut unnecessary costs and, to make more money, focus on providing goods or services with high margins,\u201d he says.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Other ways to reduce your gearing include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Paying off long-term debt to reduce interest payments.<\/li>\n\n\n\n<li>Refinancing debt to take advantage of lower interest rates or longer repayment terms.<\/li>\n\n\n\n<li>Selling non-essential assets to increase cash reserves and pay down more debt.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts\">Final thoughts<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Gearing is a little metric that goes a long way towards letting lenders and investors know the financial health of your company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s also a big boon for your business analysis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By keeping a close eye on your gearing, you\u2019ll not only be better positioned to weather any financial storms that come your way, but you\u2019ll also be better informed if or when your business sparks any investor interest.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p class=\"cta-content__title\">Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-8949a954-88b2-43bb-8b8a-77c53eb34350\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n<section class=\"more-topics alignfull has-grey-light-background-color wp-block-sage-post-topics\">\n\t<div class=\"container\">\n\t\t<div class=\"row\">\n\t\t\t<div class=\"col col-12 col-lg-4\">\n\t\t\t\t<h3 class=\"more-topics__title h2\">Browse more topics from this article<\/h3>\n\t\t\t<\/div>\n\t\t\t<div class=\"col col-12 col-lg-8\">\n\t\t\t\t<ul class=\"post-tags__list\">\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/tag\/accounting-101\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tAccounting 101\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/tag\/business-finances\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tbusiness finances\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/tag\/making-financial-decisions\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tmaking financial decisions\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/tag\/profit-and-loss\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tprofit and loss\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/tag\/staying-competitive\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tstaying competitive\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t<\/ul>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/section>\n\n<div class=\"alignfull wp-block-sage-related-posts\">\n\t<section class=\"related-posts card-grid has-dark-background-color\">\n\t<div class=\"container\">\n\t\t\t\t\t<div class=\"row\">\n\t\t\t\t<div class=\"col\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--featured h1\">Explore more wisdom<\/h2>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\n\t\t\t<div class=\"row related-posts__featured\">\n\t\t\t\t<div class=\"col card-grid__item\">\n\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-0 post-14628 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters tag-accounting-101 tag-bookkeeping tag-business-continuity tag-business-finances tag-cash-flow tag-small-business business_type-small-business card-post--is-clickable\"\n>\n\t<div class=\"card-post__media-wrapper\">\n\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"1214\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0474-1214x810.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0474-684x384.jpg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0474-768x512.jpg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0474-1214x810.jpg 1214w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\t<\/div>\n\n\t<div class=\"card-post__content\">\n\t\t\t\t\t<div class=\"card-post__label\">Recommended<\/div>\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-07-03T08:23:28-04:00\">July 3, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">8 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h3\">\n\t\t\t\t\t\t\t<a\n\t\t\t\t\tclass=\"card-post__title-link\"\n\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/accounts-payable-vs-notes-payable\/\"\n\t\t\t\t>\n\t\t\t\n\t\t\tNotes payable vs accounts payable: Differences and examples\n\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/p>\n\n\t\t\n\t\t\t\t\t<p class=\"card-post__description\">\n\t\t\t\tAre you part of your business\u2019s accounting team? Understanding the difference between notes payable and accounts payable is key to effectively managing what your business owes. \t\t\t<\/p>\n\t\t\n\t\t\t<\/div>\n\n\t<\/article>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t\t\t\t<div class=\"row related-posts__non-featured\">\n\t\t\t\t<div class=\"col col-12\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--more h4\">More on this Topic<\/h2>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-1 post-14634 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-strategy-legal-operations tag-accounting-101 tag-business-strategy tag-financial-insights tag-investments business_type-small-business business_type-medium-business business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/net-asset-value\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0465-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0465-684x384.jpg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0465-768x512.jpg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0465-1214x810.jpg 1214w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-07-03T08:20:26-04:00\">July 3, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">11 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tNAV meaning: net asset value formula and examples\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-2 post-14617 post type-post status-publish format-standard has-post-thumbnail hentry category-daily-money category-money-matters tag-accounting-101 tag-business-continuity tag-small-business tag-staying-competitive tag-supply-chain-management business_type-small-business business_type-medium-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/order-to-cash-process-otc-o2c\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1070958794-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1070958794-684x384.jpg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1070958794-768x432.jpg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1070958794-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-07-03T04:03:01-04:00\">July 3, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">12 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tWhat is the order to cash process?\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-3 post-14612 post type-post status-publish format-standard has-post-thumbnail hentry category-growth-customers category-money-matters tag-accounting-101 tag-erp tag-inventory-management tag-supply-chain-management business_type-small-business business_type-medium-business industry-distribution\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/what-is-order-fulfillment\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2025\/08\/Mar2025_GB-Trucking-Logistics_0826-684x384.jpeg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2025\/08\/Mar2025_GB-Trucking-Logistics_0826-684x384.jpeg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2025\/08\/Mar2025_GB-Trucking-Logistics_0826-768x512.jpeg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2025\/08\/Mar2025_GB-Trucking-Logistics_0826-1214x810.jpeg 1214w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-07-02T09:22:22-04:00\">July 2, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">13 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tWhat is the order fulfillment process?\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-4 post-14596 post type-post status-publish format-standard has-post-thumbnail hentry category-growth-customers category-money-matters tag-accounting-101 tag-erp tag-inventory-management tag-manufacturing tag-supply-chain-management business_type-small-business business_type-medium-business industry-distribution\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/what-is-order-processing\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2025\/08\/Mar2025_GB-Trucking-Logistics_0713-684x384.jpeg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2025\/08\/Mar2025_GB-Trucking-Logistics_0713-684x384.jpeg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2025\/08\/Mar2025_GB-Trucking-Logistics_0713-768x512.jpeg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2025\/08\/Mar2025_GB-Trucking-Logistics_0713-1214x810.jpeg 1214w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-07-02T07:35:25-04:00\">July 2, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">21 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tOrder processing explained: Steps, systems, and best practices\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Discover how the gearing ratio affects the ability of your small business to secure funding, investment and manage debt.<\/p>\n","protected":false},"author":1774,"featured_media":8144,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[7],"tags":[162,266,195,202,208],"business_type":[3,99],"lilypad":[],"context":[],"industry":[],"persona":[100,83],"imagine_tag":[],"coauthors":[307],"class_list":["post-11654","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-accounting-101","tag-business-finances","tag-making-financial-decisions","tag-profit-and-loss","tag-staying-competitive","business_type-small-business","business_type-medium-business"],"sage_meta":{"region":"en-ca","author_name":"Yassir Malik","featured_image":"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1252669785.jpg","imagine_tags":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Canada English","distributor_original_site_url":"https:\/\/www.sage.com\/en-ca\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/11654","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/users\/1774"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/comments?post=11654"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/11654\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media\/8144"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media?parent=11654"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/categories?post=11654"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/tags?post=11654"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/business_type?post=11654"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/lilypad?post=11654"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/context?post=11654"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/industry?post=11654"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/persona?post=11654"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/imagine_tag?post=11654"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/coauthors?post=11654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}