Question

compute debt equity ratio and proprietary ratio from rhe following information.paid up share capital 500000 current assets 400000 13 percent debenture 200000 current liability 280000.​

Answer 1

Answer:

Debt to equity ration = Debt ÷ equity

Debt = debentures - current liabilities

= debt = 2,00,000 - 2,80,000 = 80,000.

Equity = shareholders funds - total debt.

Equity = 5,00,000 - 80,000 = 4,20,000.

Now,

• 80,000 ÷ 4,20,000 = 0.19 :1 (answer).