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Debt to Capital Employed ratio is 0.3:1. State whether the following transaction and give a reason. Tax Refund of ₹ 50,000 during the year. - Accountancy

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Question

Debt to Capital Employed ratio is 0.3:1. State whether the following transaction, will improve, decline or will have no change on the Debt to Capital Employed Ratio. Also give a reason for the same.

Tax Refund of ₹ 50,000 during the year.

Options

  • Ratio will improve.

  • Ratio will decline.

  • Ratio has no change.

MCQ
One Line Answer
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Solution

Ratio will decline.

Reason – Capital Employed will increase but Debt will remain the same.

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2022-2023 (March) Analysis of Financial Statements
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