Question

calculate:

a)debt to equity ratio

b)total asset to debt ratio

c)proprietory ratio

given following:

1.long term borrowings:1,00,000

2.long term provision:50,000

3.current liabilities:25,000

4.non current assets:1,80,000

5.current assets:45,000

Answer 1

1. Debt-Equity Ratio = Debt/Equity
Debt = Long-Term Debt+Long-Term Provision
Rs 1,00,000+Rs 50,000 = Rs 1,50,000
Equity/Shareholder's Fund/Proprietor's Fund = Non-Current Assets+Current Assets-Current Liabilities
Rs 1,80,000+Rs 45,000-Rs 25,000 = Rs 2,00,000.
Debt-Equity Ratio = 1,50,000/2,00,000 = 0.75:1.

2. Total Assets to Debt Ratio = Total Assets/Debts
Total Assets = Non-Current Assets+Current Assets
Rs 1,80,000+Rs 45,000 = Rs 2,25,000.
Total Assets to Debt Ratio = 2,25,000/1,50,000 = 1.5:1

3. Proprietary Ratio = Proprietor's Fund/Total Assets
Proprietary Ratio = 2,00,000/2,25,000 = 0.88:1.