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Total Assets ₹ 2,60,000; Total Debts ₹ 1,80,000; Current Liabilities ₹ 20,000. Calculate Debt to Equity Ratio. - Accountancy

Sum

Total Assets ₹ 2,60,000; Total Debts ₹ 1,80,000; Current Liabilities ₹ 20,000. Calculate Debt to Equity Ratio. 

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Solution

Total Debts = 1,80,000

Current Liabilities = 20,000

Long-term Debts = Total Debts − Current Liabilities

= 1,80,000 − 20,000 = 1,60,000

Equity = Total Assets − Total Debt

= 2,60,000 − 1,80,000 = 80,000

`"Debt - Equity Ratio" = "Long Term Debts"/"Equity" = 160000/80000 = 2 : 1`

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APPEARS IN

TS Grewal Class 12 Accountancy - Analysis of Financial Statements
Chapter 3 Accounting Ratios
Exercise | Q 34 | Page 94
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