Question

Calculate Total Assets to Debt Ratio from the following information:    

Particulars	₹	Particulars		₹
Total Assets	15,00,000	Bills Payable		60,000
Total Debts	12,00,000	Bank Overdraft		50,000
Creditors	90,000	Outstanding Expenses		20,000

Answer 1

Total Assets = Rs 15,00,000
Current Liabilities = Creditors + Bills Payable + Bank Overdraft + Outstanding Expenses
= Rs 90,000 + Rs 60,000 + Rs 50,000 + Rs 20,000
= Rs 2,20,000
Long-Term Debt = Total Debt – Current Liabilities
= Rs 12,00,000 – Rs 2,20,000 = Rs 9,80,000

Total Assets to Debt Ratio = `"Total Assets"/ "Long-Term Debts" = 1500000/980000 = 1.53 : 1`