Question

(a) Calculate Total Assets to Debt Ratio' from the following information:
Equity Share Capital
4,00,000
Long-term Borrowings
1,80,000
Surplus, i.e., Balance in Statement of Profit and Loss
1,00,000
General Reserve
70,000
Current Liabilities
30,000
Long-term Provisions
1,20,000
(b) The Debt-Equity Ratio of a company is 1:2. State whether 'Issue of bonus shares'
will increase, decrease or not change the Debt-Equity Ratio.
22. From the following information

Answer 1

Answer:

we know that

total assets to debt=total assets /debt

here, total assets=4,00,000+1,80,000+1,00,000+70,000+30,000+1,20,000(total assets =total liab)

=9,00,000

:.total assets to debt ratio=9,00,000/3,00,000

=3:1