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Question
Calculate Debt to Total Assets Ratio of Moonlight Ltd. (up-to two decimal places) from the following information:
| Particulars | (₹) |
| Property, Plant & Equipment and Intangible Assets | 20,00,000 |
| Shares of XYZ Bank Ltd. | 1,00,000 |
| Long-term Loans and Advances | 1,00,000 |
| Current Assets | 10,00,000 |
| Current Liabilities | 4,00,000 |
| Total Debt | 12,00,000 |
Solution
Debt to Total Assets Ratio = `"Long Term Debts"/"Total Assets"`
Long-term debts = Total debts - Current liabilities
= 12,00,000 - 4,00,000
= ₹ 8,00,000
Total assets = Property, plant & equipment and Tangible assets + Shares of XYZ bank Ltd. + Long-term loans and advances + Current assets
= 20,00,000 + 1,00,000 + 1,00,000 + 10,00,000
= ₹ 32,00,000
Debt to total assets ratio = `(8,00,000)/(32,00,000)`
Debt to total assets ratio = 0.25 : 1
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