Definitions 
Gearing is a commonly used barometer of how much debt the company in question has proportionally to equity.
As an example, say we have a property company with properties worth $100000 and debt of $20000.
The equity is 100000 - 20000 = $80000. To calculate the gearing we simply divide the companies debt by its equity: 20000 / 80000 = 0.25. This gives us a gearing of 25%.
Gearing and Risk
In general, we can say that the higher the gearing the more risk that a company is not be able to services its loans. No two companies are alike though, and gearing must be viewed in the context of the company. Note that banks are in general highly geared businesses, and are not generally viewed as businesses under risk of going bankrupt.
