# From the Following Balance Sheet of Abc Ltd. as at 31st March, 2019, Calculate Debt to Equity Ratio: - Accountancy

Sum

From the following Balance Sheet of ABC Ltd. as at 31st March, 2019, Calculate Debt to Equity Ratio:

 Particulars ₹ I. EQUITY AND LIABILITIES 1. Shareholder's Funds (a) Share Capital: (i) Equity Share Capital 5,00,000 (ii) 10% Preference Share Capital 5,00,000 10,00,000 (b) Reserves and Surplus 2,40,000 2. Non-Current Liabilities Long-term Borrowings (Debentures) 2,50,000 3. Current Liabilities : (a) Trade Payables 4,30,000 (b) Other Current Liabilities 20,000 (c) Short-term Provisions: Provision for Tax 3,00,000 Total 22,40,000 II. ASSETS 1. Non-Current Assets Fixed Assets: (i) Tangible Assets 6,40,000 (ii) Intangible Assets 1,00,000 2. Current Assets (a) Inventories 7,50,000 (b) Trade Receivables 6,40,000 (c) Cash and Cash Equivalents 1,10,000 Total 22,40,000

#### Solution

Long-term Debt = Debentures = 2,50,000

Equity = Equity Share Capital + 10% Preference Share Capital + Reserves and Surplus

= 5,00,000 + 5,00,000 + 2,40,000 = 12,40,000

"Debt - Equity Ratio" = "Long-term Debts"/"Equity" 250000/1240000 = 0.2 : 1

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#### APPEARS IN

TS Grewal Class 12 Accountancy - Analysis of Financial Statements
Chapter 3 Accounting Ratios
Exercise | Q 43 | Page 96