Question

ABC Limited has a current ratio of rupees 2.5 : 1 its working capital rupees 120000, Total

assets are of rupees 380000 and total debt of 280000 calculate debt to equity ratio
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Answer 1

This implies that

x2+2ax=4x−4a−13

or

x2+2ax−4x+4a+13=0

or

x2+(2a−4)x+(4a+13)=0

Since the equation has just one solution instead of the usual two distinct solutions, then the two solutions must be same i.e. discriminant = 0.

Hence we get that

(2a−4)2=4⋅1⋅(4a+13)

or

4a2−16a+16=16a+52

or

4a2−32a−36=0

or

a2−8a−9=0

or

(a−9)(a+1)=0

So the values of a are −1 and 9.