Seth Pvt.Ltd. provides following information.
Equity Share Capital 1,00,000
$5 %$ Preference Share Capital 50,000
$6 %$ Debentures 20,000
General Reserve 30,000
P & L Account 20,000
What is the 'Capital Generating Ratio' of the Company?

1 : 1

No worries! We‘ve got your back. Try BYJU‘S free classes today!

1 : 2.14

No worries! We‘ve got your back. Try BYJU‘S free classes today!

2 : 2.14

No worries! We‘ve got your back. Try BYJU‘S free classes today!

2.14 : 1

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is C 2.14 : 1
Capital general ratio = $\frac{E q u i t y s h a r e h o l d e r s F u n d s}{I n t e r e s t b e a r i n g l o a n s / d e b e n t u r e s + P r e f . S h a r e C a p i t a l}$
= $\frac{1, 00, 000 + 30, 000 + 20, 000}{50, 000 + 20, 000}$
= $\frac{1, 50, 000}{70, 000}$
=2.14:1.

Suggest Corrections

Similar questions

Net Profit before interest and tax Rs. 80,000; Equity share capital of Rs. 1,20,000; 10% Preference Share Capital of Rs. 50,000; 12% Debentures Rs. 1,00,000; Reserves and Surplus Rs. 1,30,000; Tax rate 50%; Calculate Return on Investment.

From the following, calculate (a) Debt Equity Ratio (b) Total Assets to Debt Ratio (c) Proprietary Ratio.

	Rs
Equity Share Capital	75,000
Preference Share Capital	25,000
General Reserve	45,000
Accumulated Profits	30,000
Debentures	75,000
Sundry Creditors	40,000
Outstanding Expenses	10,000

Q. Calculate Debt to Equity Ratio: Equity Share Capital ₹ 5,00,000; General Reserve ₹ 90,000; Accumulated Profits ₹ 50,000; 10% Debentures ₹ 1,30,000; Current Liabilities ₹ 1,00,000.

Q. Assertion :Capital structure refers to composition of long-term funds. Reason: These include equity share capital, preference share capital, debentures, all debts and all reserves.

Q. Statement - I : Capital structure refers to composition of long-term funds.
Statement - II : These include equity share capital, preference share capital, debentures, all debts and all reserves.

Join BYJU'S Learning Program

Seth Pvt.Ltd. provides following information.Equity Share Capital 1,00,0005% Preference Share Capital 50,0006% Debentures 20,000General Reserve 30,000P & L Account 20,000What is the 'Capital Generating Ratio' of the Company?

The correct option is C 2.14 : 1Capital general ratio = Equity shareholders FundsInterest bearing loans/debentures+Pref.ShareCapital= 1,00,000+30,000+20,00050,000+20,000=1,50,00070,000=2.14:1.

Seth Pvt.Ltd. provides following information.
Equity Share Capital 1,00,000
$5 %$ Preference Share Capital 50,000
$6 %$ Debentures 20,000
General Reserve 30,000
P & L Account 20,000
What is the 'Capital Generating Ratio' of the Company?