Calculate debt equity ratio from the following information Weginarray -r- Whlinelendarray

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Standard XII

Accountancy

Interest on Drawings-Withdrawn in the Beginning of Every Month

Calculate deb...

Question

Calculate debt equity ratio from the following information

$\begin{matrix} Items & Rs. Total Assets & 15,00,000 Current Liabilities & 6,00,000 Total Debts & 12,00,000 \end{matrix}$

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Solution

Debt Equity Ratio = $\frac{L o n g - t e r m D e b t}{E q u i t y}$

Equity
= Total Assets – Total Debts
= Rs. 15,00,000 – Rs. 12,00,000
= Rs. 3,00,000

Long-term Debt
= Total Debts – Current liabilities
= Rs. 12,00,000 – Rs. 6,00,000
= Rs. 6,00,000

Debt Equity Ratio
= $\frac{6, 00, 000}{3, 00, 000}$
= 2 : 1

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Similar questions

Calculate Debt Equity Ratio from the following information:

$\begin{matrix} Rs. Equity Share Capital & 3, 00, 000 Preference Share Capital & 1, 00, 000 General Reserve & 1, 30, 000 Securities Premium & 40, 000 Profit & Loss Balance & 70, 000 10 % Debentures & 4, 50, 000 Loan from Bank & 3, 50, 000 Current Liabilities & 20, 000 \end{matrix}$

Q. From the following information, calculate Debt to Equity Ratio:

	₹
10,000 Equity Shares of ₹ 10 each fully paid	1,00,000
5,000; 9% Preference Shares of ₹ 10 each fully paid	50,000
General Reserve	45,000
Surplus, i.e., Balance in Statement of Profit and Loss	20,000
10% Debentures	75,000
Current Liabilities	50,000

Calculate debt equity ratio from the following information:

	Rs
Total Assets	15,00,000
Current Liabilities	6,00,000
Total Debts	12,00,000

From the following Balance Sheet and other information, calculate following ratios:

(i) Debt-Equity Ratio (ii) Working Capital Turnover Ratio (iii) Trade Receivables Turnover Ratio

Balance Sheet as at March 31, 2017
Particulars	Note No.	Rs.
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share capital		10,00,000
b) Reserves and surplus		9,00,000
2. Non-current Liabilities
Long-term borrowings		12,00,000
3. Current Liabilities
Trade payables		5,00,000
Total		36,00,000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets		18,00,000
2. Current Assets
a) Inventories		4,00,000
b) Trade Receivables		9,00,000
c) Cash and cash equivalents		5,00,000
Total		36,00,000

Additional Information: Revenue from Operations Rs. 18,00,000

Q. On the basis of the following information calculate:

(i) Debt to Equity Ratio; and
(ii) Working Capital Turnover Ratio.

Information:		₹		₹
Revenue from Operations:	(a) Cash Sales	40,00,000	Paid-up Share Capital	17,00,000
	(b) Credit Sales	20,00,000	6% Debentures	3,00,000
Cost of Goods Sold		35,00,000	9% Loan from Bank	7,00,000
Other Current Assets		8,00,000	Debentures Redemption Reserve	3,00,000
Current Liabilities		4,00,000	Closing Inventory	1,00,000

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Calculate debt equity ratio from the following information ItemsRs.Total Assets15,00,000Current Liabilities6,00,000Total Debts12,00,000

Debt Equity Ratio = Long−termDebtEquity Equity = Total Assets – Total Debts = Rs. 15,00,000 – Rs. 12,00,000 = Rs. 3,00,000 Long-term Debt = Total Debts – Current liabilities = Rs. 12,00,000 – Rs. 6,00,000 = Rs. 6,00,000 Debt Equity Ratio = 6,00,0003,00,000 = 2 : 1

Calculate debt equity ratio from the following information

$\begin{matrix} Items & Rs. Total Assets & 15,00,000 Current Liabilities & 6,00,000 Total Debts & 12,00,000 \end{matrix}$