25. Capital management

PagSeguro Group monitors capital on the basis of the gearing ratio which corresponds to net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings as shown in the consolidated balance sheet) less cash and banks. Total capital is calculated as equity as shown in the consolidated balance sheet plus net debt.

During 2016, PagSeguro Group's strategy was to maintain a gearing ratio of up to 20%. The gearing ratio at December 31, 2016 was as follows:


	December 31, 2016
Borrowings		205,204
(-) Cash and cash equivalents		(79,969	)

Net debt		125,235

Total equity		626,862
Total capital		752,097

Gearing ratio		16.65%

PagSeguro Group had no borrowings as of December 31, 2017.