Question

Calculate Debt Equity Ratio, from the following information:-

Total external liabilities Rs. 5,00,000, Balance Sheet Total Rs. 10,10,000 Current liabilities Rs. l,00,000 Fictitious Assets Rs. 10,000.

विकल्प

• 4 : 5

• 2 : 9

• 1 : 6

• 2 : 2

Answer 1

4 : 5

Explanation:

Long-term Debt = Total External Liabilities - Current Liabilities

= Rs. 5,00,000 - Rs. 1,00,000

= Rs. 4,00,000

Total Non-fictitious Assets = Total Assets - Fictitious Assets

= Rs. 10,10,000 - Rs. 10,000

= Rs. 10,00,000

Shareholders Funds = Non-fictitious Total Assets - Total liabilities

= Rs. 10,00,000 - Rs. 5,00,000

= Rs. 5,00,000

Debt Equity Ratio = Rs. 4,00,000/Rs. 5,00,000

Debt Equity Ratio = 4 : 5.