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Calculate Debt Equity Ratio from the Following Information: - Accountancy

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ConceptTypes of Ratios

Question

Calculate debt equity ratio from the following information:

 

 

Rs

Total Assets

15,00,000

Current Liabilities

6,00,000

Total Debts

12,00,000

 

 

Solution

`"Debt Equity Ratio" = "Debt "/"Equity"`

`"Equity" = "Total Assets" - "Total Debts"`

               = `15,00,000 - 12,00,000`

               = `3,00,000`

Long Term Debts = Total Debts − Current Liabilities

`"Debt Equity Ratio" = "Long Term Debt"/"Equity"`

or,`"Debt Equity Ratio" = "6,00,000"/"3,00,000" = 2/1= 2:1`

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Solution Calculate Debt Equity Ratio from the Following Information: Concept: Types of Ratios.
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