While calculsting Debt-equity ratio , do we include Defferd tax liablites(debt) ?

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Solution

Hey,
Deferred Tax Liability is a current liability that arises when the actual tax and the tax paid by the company is different. This difference amount is a deferred liability which will remain in the business until paid. Thus, it will not form part of Long-term Debts for the computation of Debt-Equity Ratio.

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