Numerical
Calculate debt equity ratio from the following information:
|
|
Rs |
|
Total Assets |
15,00,000 |
|
Current Liabilities |
6,00,000 |
|
Total Debts |
12,00,000 |
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Solution
`"Debt Equity Ratio" = "Debt "/"Equity"`
`"Equity" = "Total Assets" - "Total Debts"`
= `15,00,000 - 12,00,000`
= `3,00,000`
Long Term Debts = Total Debts − Current Liabilities
`"Debt Equity Ratio" = "Long Term Debt"/"Equity"`
or,`"Debt Equity Ratio" = "6,00,000"/"3,00,000" = 2/1= 2:1`
Concept: Types of Ratios
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