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Particulars Long-term Borrowings, Bank Overdraft, Shareholder’s Funds, General Reserve, Securities Premium Reserve, ₹ 18,00,000, 6,00,000, 12,00,000, 3,00,000, 5,00,000, Debt-Equity Ratio will be: - Accounts

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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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Chapter 14: Ratio Analysis - OBJECTIVE TYPE QUESTIONS [Page 14.174]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 14 Ratio Analysis
OBJECTIVE TYPE QUESTIONS | Q 7. | Page 14.174
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