Sum
Calculate Debt to Equity Ratio from the following information:
| ₹ | ₹ | |||
| Fixed Assets (Gross) | 8,40,000 | Current Assets | 3,50,000 | |
| Accumulated Depreciation | 1,40,000 | Current Liabilities | 2,80,000 | |
| Non-current Investments | 14,000 | 10% Long-term Borrowings | 4,20,000 | |
| Long-term Loans and Advances | 56,000 | Long-term Provisions | 1,40,000 |
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Solution
Debt = Long Term Borrowings + Long Term Provisions
= 420000 + 140000 = Rs 560000
Equity = Total Assets - Total Debts
= (840000 - 140000 + 14000 + 56000 + 350000) - (420000 - 140000 - 280000) = Rs 280000
`"Debt- Equity Ratio" = "Debt"/"Equity" = 560000/280000 = 2 : 1`
Concept: Types of Ratios
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