Question

Equity Share Capital ₹20,00,000; Reserve 5,00,000; Debentures ₹10,00,000; Current Liabilities ₹8,00,000. Debt-equity ratio will be​

Answer 1

GIVEN : Equity Share Capital = 20,00,000 ; Reserve = 5,00,000; Debentures = 10,00,000 ; Current Liabilities = 8,00,000

TO FIND : Dues equtiy ratio

SOLUTION :

Dues  Equity Ratio = $\frac{Total Liabilities }{Total Shareholder's Equity }$

Dues Equity Ratio =  $\frac{Debentures + Current Liabilities }{Equity Share Capital + Reserve }$

                            =  $\frac{10,00,000 + 8,00,000 }{20,00,000 + 5,00,000}$

                           =  $\frac{18,00,000}{25,00,000}$

                            = 0.72

Dues equity ratio is a ratio in which all the dues  are divided by the equity .

Dues Equity Ratio is 0.72 .