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प्रश्न
The debt equity ratio of M Ltd. is 2:1. State with reasons whether the following transaction will increase, decrease or not change the debt equity ratio :
- Obtained a loan from ICICI Bank ₹1,00,000 payable after 5 years.
- Purchased machinery for cash ₹1,50,000.
- Redeemed 9% debentures ₹1,00,000.
- Issued equity shares for purchase of machinery of ₹5,00,000 to the vendors.
उत्तर
Debt Equity Ratio = 2 : 1
Debt Equity Ratio =`"Debt"/"Equity" = (20,00,000)/(10,00,000)`[assumed figures]
- Loan from ICICI - ₹1,00,000
Increases as debts will increases `(21,00,000)/(10,00,000)= 2.1 :1` - Machinery purchased for cash ₹1,50,000
No change as, machinery is a fixed assets and cash is a current asset, then it will not change debt equity ratio. - Redeem 9% debentures of ₹1,00,000
Debt =20,00,000 - 1,00,000 = ₹19,00,000
New Ratio =`(19,00,000)/(10,00,000) = 19 :1`
Thus, Ratio will decrease. - Issue equity shares ₹5,00,000 for machinery
Equity = 10,00,000 + 5,00,000 = 15,00,000
New ratio =`(20,00,000)/(15,00,000)= 0.8 :1`
Equity will increase, therefore ratio will decrease.
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संबंधित प्रश्न
The current ratio of Z. Ltd is 1: 1. A state with reason which of the following transaction would
1. increase;
2. decrease or
3. not change the ratio.
1. Included in the trade payables was a bill payable of Rs 3,000 which was met on maturity
2. Debentures of Rs 50,000 were converted into Equity Share
State whether following statement is true or false.
Ratio Analysis is useful for inter-firm comparison.
Give one word/term/ phrase for the following statement
A particular mathematical number showing relationship between two accounting figures.
Short Answer Question
What do you mean by Ratio Analysis?
Handa Ltd.has inventory of Rs 20,000. Total liquid assets are Rs 1,00,000 and quick ratio is 2:1. Calculate current ratio.
Gross Profit Ratio indicates the relationship of gross profit to the ___________.
Net-Profit Ratio is equal to __________.
Generally Current Ratio should be ___________.
Give one word/term/phrase for the following statement.
The ratio measures the relationship between Gross Profit and Net Sales.
State true or false with reason.
Usually current ratio should be 3:1.
Answer in one sentence only.
Give the formula of gross profit?
Answer in one sentence only.
Give the formula of current ratio?
Answer in one sentence only.
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| Cost of good sold | ₹ 2,60,000 |
| Indirect Exp | ₹ 60,000 |
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| 2) Current Liabilities | ₹ 1,00,000 |
What is current Ratio.
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When the concept of ratio is defined in respect to the items shown in the financial statements, it is termed as:
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What are the Limitations of Ratio Analysis?
Current Assets: ₹ 1,00,000. Current Liabilities : ₹ 60,000. Calculate Current Ratio.
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______ratios are calculated for measuring the efficiency of operations of business based on effective utilization of resources.
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- Calculate debt to capital employed ratio from the following information.
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Do you agree or disagree with the following statements:
ROCE should be less than ROI.
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Calculate Net profit ratio from the following:
Sales = ₹ 6,08,000, Cost of goods sold = ₹ 4,16,000,
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Calculate gross profit ratio. Sales = ₹ 5,00,000, Sales return = ₹ 50,000 and Cost of goods sold = ₹ 2,75,000.
