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Question
Debt to Capital Employed ratio is 0.3:1. State whether the following transaction, will improve, decline or will have no change on the Debt to Capital Employed Ratio. Also give a reason for the same.
Conversion of Debentures into Equity Shares of ₹ 2,00,000.
Options
Ratio will improve.
Ratio will decline.
Ratio has no change.
Solution
Ratio will decline.
Reason – Debt will decrease but Capital Employed will remain the same.
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Rs |
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|
₹ |
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