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      Question

      Calculate Debt Equity Ratio I. Equity and

      Liabilities: 1. Shareholders’ funds a) Share capital 4,00,000 b) Reserves and surplus 1,00,000 2. Non-current Liabilities Long-term borrowings 1,50,000 3. Current Liabilities 50,000 7,00,000 II. Assets 1. Non-current Assets a) Fixed assets 4,00,000 b) Non-current investments 1,00,000 2. Current Assets 2,00,000
      A 0.2:1 Correct Answer Incorrect Answer
      B 0.3:1 Correct Answer Incorrect Answer
      C 0.5:1 Correct Answer Incorrect Answer
      D 0.75:1 Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Debt-Equity Ratio =Debts/Equity Debt = Long-term borrowings = Rs. 1,50,000 Equity = Share capital + Reserves and surplus = Rs. 4,00,000 + Rs. 1,00,000 = Rs. 5,00,000 Debt-Equity Ratio =Rs. 1,50,000/Rs. 5,00,000 = 0.3 : 1

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