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    Question

    What is the debt equity ratio of the company?

    Direction (14 -17):- Study the Balance Sheet below to answer the questions below:
    A 0.61 Correct Answer Incorrect Answer
    B 0.63 Correct Answer Incorrect Answer
    C 0.71 Correct Answer Incorrect Answer
    D 0.75 Correct Answer Incorrect Answer
    E 0.79 Correct Answer Incorrect Answer

    Solution

    Debt Equity = Debt/Shareholder funds Debt = Long term borrowing = 12,00,000 Shareholder funds = Share capital + reserves and surplus + money received against share warrants)                         = 10,00,000 + 7,00,000 + 2,00,000                         = 19,00,000 Debt equity (D/E) ratio = 12,00,000/19,00,000                                     = 0.63 times

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