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Question
Calculate Debt Equity Ratio from the following:
| ₹ | |
| Property, Plant and Equipment | 24,50,000 |
| Intangible Assets | 3,00,000 |
| Current Assets | 3,34,000 |
| Current Liabilities | 84,000 |
| Long-term Borrowings | 16,00,000 |
| Long-term Provisions | 1,50,000 |
Numerical
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Solution
Debt Equity Ratio = `"Debt"/"Equity"`
Dept = Long term Borrowing + Long term Provision
= ₹ 16,00,000 + ₹ 1,50,000
= ₹ 17,50,000
Equity = Total Assets − Current liabilities − Non Current liabilites
= (Property, Plant and Equipment + Intangible Assets + Current Assets) − Current liabilities − (Long-term Borrowings + Long-term Provisions)
= ₹ 24,50,000 + ₹ 3,00,000 + ₹ 3,34,000 − ₹ 84,000 − (₹ 16,00,000 + ₹ 1,50,000)
= ₹ 12,50,000
= `(₹ 17,50,000)/(₹ 12,50,000)`
= 1.4 : 1
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