Question

38. From the following information, calculate Debt to Equity Ratio:
10,000 Equity Shares of 10 each fully paid
5,000; 9% Preference Shares of 10 each fully paid
General Reserve
Surplus, i.e., Balance in Statement of Profit and Loss
10% Debentures
Current Liabilities
1,00,000
50,000
45,000
20,000
75,000
50,000

Answer 1

Using the following information, complete the Balance Sheet given below : ... Calculate P/V ratio and Earning per Share (EPS) ... It has borrowed + 10,00,000 @ 10 % p.a. and its equity share capital is + 10,00,000

Answer 2

$\sf\red{Debt = 10\% \: debentures= 75,000}$

$\sf\red{Equity = 10,000 \: equity\:shares \:of \: ₹10\: each\:fully \:paid+5,000;9\% \: preference \: shares \: of\:₹10 \:each \: fully\: paid\: +General \:reserve+ \: surplus}$

$\implies$$\sf{ 1,00,000+50,000+45,000+20,000}$

$\implies$$\sf{1,95,000}$

$\sf\red{Debt \: to \: equity \: ratio = \frac{debt}{equity} }$

$\implies$$\sf{\frac{75,000}{1,95,000} }$

$\implies$$\sf{0.35:1}$