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Question
Calculate Debt Equity Ratio from the following:
Total Assets ₹ 2,30,000; Total Debt ₹ 1,50,000; Current Liabilities ₹ 30,000.
Numerical
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Solution
Debt Equity Ratio = `"Debt"/"Equity"`
Debt = Total Debt − Current Liabilities
= ₹ 1,50,000 − ₹ 30,000
= ₹ 1,20,000
Equity = Total Assets − Total Debt
= ₹ 2,30,000 − ₹ 1,50,000
= ₹ 80,000
Debt Equity Ratio = `(₹ 1,20,000)/(₹ 80,000)`
= 1.5 : 1
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