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.

Purchased Goods on Credit for ₹ 1,00,000 for a credit of 15 months, assuming operating cycle is of 18 months.

विकल्प

• Ratio will improve.

• Ratio will decline.

• Ratio has no change.

Answer 1

Ratio has no change.

Reason – Both Debt and Capital Employed will remain the same.