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Question
| Particulars | ₹ |
| Long-term Borrowings | 18,00,000 |
| Bank Overdraft | 6,00,000 |
| Shareholder’s Funds | 12,00,000 |
| General Reserve | 3,00,000 |
| Securities Premium Reserve | 5,00,000 |
Debt-Equity Ratio will be:
Options
2 : 1
1.2 : 1
0.9 : 1
1.5 : 1
MCQ
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Solution
1.5 : 1
Explanation:
Debt Equity Ratio = `"Long term Debts"/"Shareholder’s Funds"`
= `(18,00,000)/(12,00,000)`
= 1.5 : 1
Note: General Reserve and Securities Premium Reserve are already included in Shareholder’s Funds.
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