Sum
Capital Employed ₹8,00,000; Shareholders' Funds ₹2,00,000. Calculate Debt to Equity Ratio.
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Solution
Shareholders’ Funds = 2,00,000
Capital Employed = 8,00,000
Long- Term Debts = Capital Employed − Shareholders’ Funds
= 8,00,000 − 2,00,000 = 6,00,000
`"Debt - Equity Ratio" = "Long-term Debts"/"Equity" = 600000/200000 = 3:1`
Concept: Types of Ratios
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