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प्रश्न
What is meant by debt-equity ratio?
उत्तर
It is calculated to assess the long-term solvency position of a business concern. The debt-equity ratio expresses the relationship between long-term debt and shareholder’s funds.
Debt equity ratio = `"Long term debt"/"Shareholders funds"`
Capital employed = Shareholder’s funds + Noncurrent liabilities
Greater the return on investment better is than the profitability of a business and vice versa.
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संबंधित प्रश्न
From the following information calculate a debt-equity ratio.
Balance Sheet (Extract) as on
31st March, 2019
| Particulars | Amount ₹ |
| I. EQUITY AND LIABILITIES | |
| 1. Shareholders' funds | |
| (a) Share capital | |
| Equity share capital | 6,00,000 |
| (b) Reserves and surplus | 2,00,000 |
| 2. Non-current liabilities | |
| Long-term borrowings (Debentures) | 6,00,000 |
| 3. Current liabilities | |
| (a) Trade payables | 1,60,000 |
| (b) Other current liabilities | |
| Outstanding expenses | 40,000 |
| Total | 16,00,000 |
Current ratio indicates ______.
Current assets excluding inventory and prepaid expenses is called ______.
Proportion of share holders' funds to total assets is called ______.
Which one of the following is not correctly matched?
What does the return on investment ratio indicate?
From the given information calculate the inventory turnover ratio and inventory conversion period (in months) of Devi Ltd.
| Particulars | Rs. |
| Revenue from operations | 12,00,000 |
| Inventory at the beginning of the year | 1,70,000 |
| Inventory at the end of the year | 1,30,000 |
| Purchase made during the year | 6,90,000 |
| Carriage inwards | 20,000 |
The credit revenue from operations of Velavan Ltd, amounted to ₹ 10,00,000. Its debtors and bills receivables at the end of the accounting period amounted to ₹ 1,10,000 and ₹ 1,40,000 respectively. Calculate trade receivables turnover ratio and also collection period in months.
Calculate operating profit ratio under the following cases.
Case 1: Revenue from operations ₹ 8,00,000, Operating profit ₹ 2,00,000.
Case 2: Revenue from operations ₹ 20,00,000, Operating cost ₹ 14,00,000.
Case 3: Revenue from operations ₹ 10,00,000, Gross profit 25% on revenue from operations, Operating expenses ₹ 1,00,000.
Following is the extract of balance sheet of Abdul Ltd., as on 31st March, 2019:
| Particulars | Rs. |
| I EQUITY AND LIABILITIES | |
| 1. Shareholders’ Funds | |
| a) Share capital | 2,00,000 |
| b) Reserves and surplus | 50,000 |
| 2. Non-Current liabilities | |
| Long-term borrowings | 1,50,000 |
| 3. Current liabilities | |
| (a) Trade Payable | 1,30,000 |
| (b) Reserves and surplus | 5,000 |
| (c) Short–term provisions | 20,000 |
| Total | 5,55,000 |
Net profit before interest and tax for the year was ₹ 60,000. Calculate the return on capital employed for the year.
