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Question
calculate debt equity ratio
total assets:2,30,000
total debt:1,50,000
current liabilities:30,000
calculate debt equity ratio
total assets:2,30,000
total debt:1,50,000
current liabilities:30,000
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Solution
Debt-Equity Ratio = Long-Term Debt/Equity (Shareholder's Fund)
Long-Term Debt = Total Debt-Current Liabilities
Rs 1,50,000-Rs 30,000 = Rs 1,20,000.
Equity/Shareholder's Fund = Total Assets-Total Debts
Rs 2,30,000-Rs 1,50,000 = Rs 80,000
Debt-Equity Ratio = Rs 1,20,000/Rs 80,000 = 1.5:1
Long-Term Debt = Total Debt-Current Liabilities
Rs 1,50,000-Rs 30,000 = Rs 1,20,000.
Equity/Shareholder's Fund = Total Assets-Total Debts
Rs 2,30,000-Rs 1,50,000 = Rs 80,000
Debt-Equity Ratio = Rs 1,20,000/Rs 80,000 = 1.5:1
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