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प्रश्न
Debt-Equity Ratio of Z Ltd. is 2: 1. State with reason whether the following transactions will improve, decline or will not change the debt-equity ratio:
- Conversion of ₹ 3,00,000, 9% debentures into equity shares.
- Cash received from debtors ₹ 1,00,000.
- Redemption of ₹ 10,00,000, 11% debenture.
- Purchase of goods on credit ₹ 4,00,000.
उत्तर
| Transaction | Effect | Reason |
| (i) | Decrease | Total long-term debts have decreased and total shareholders' funds have increased by the same amount. Therefore, Debt to Equity ratio will decrease. |
| (ii) | No change | Both long-term debts and shareholders' Funds will remain unchanged. Therefore, Debt to Equity Ratio will not change. |
| (iii) | No change | Long-term debt are not affected because debentures redeemed are current liabilities. Because long-term liabilities maturing within 12 months are shown as current liabilities under current maturities of long-term debts. Shareholder's Fund will also remain unchanged. Therefore, Debt to Equity Ratio will not change. |
| (iv) | No change | Both long-term debts and shareholders' funds will remain unchanged. Therefore, Debt to Equity Ratio will not change. |
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संबंधित प्रश्न
What is meant by solvency of business.
From the Following information , compute Debt-Equity Ratio:
Rs.
Long Term Borrowings 2,00,000
Long Term Provision 1,00,000
Current Liabilities 50,000
Non-Current-Assets 3,60,000
Current -Assets 90,000
Give the meaning of 'Long-Term Provisions'.
From the Following information, compute Debt-Equity Ratio
| Long-Term Borrowings | 4,00,000 |
| Long-Term Provision | 2,00,000 |
| Current Liabilities | 1,00,000 |
| Non-Current-Assets | 7,20,000 |
| Current -Assets | 1,80,000 |
From the Following information, compute Debt-Equity Ratio
| Rs | |
| Long-Term Borrowings | 8,00,000 |
| Long-Term Provision | 4,00,000 |
| Current Liabilities | 2,00,000 |
| Non-Current-Assets | 14,40,000 |
| Current -Assets | 3,60,000 |
Calculate Debt-Equity Ratio
| Particulars | Rs |
| Total Assets | 3,50,000 |
| Total Debts | 2,50,000 |
| Current Liabilities | 80,000 |
Pick the odd one out:
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| The company’s board declared an interim dividend of ₹ 6.25 per share for the financial year ending March, 2024. The dividend will be paid between February 26-28, 2024, to the eligible shareholders. |
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P: It is a charge against profits.
Q: It is an appropriation of profits.
R: Its declaration and payment will decrease the company’s Current Ratio.
S: Its declaration and payment will increase the company’s Debt Equity Ratio.
