Equity share capital 200000 General reserve 160000 10% Debentures 150000 Current liabilities 100000 an Preliminary expenses 10000 hai so what is Debt Equity ratio
Answers
Answer:
Debt- Equity Ratio =
Shareholder
′
sFunds
Long−TermDebt
Total Assets = Total Liabilities + Shareholder's Funds
Total Assets = Current Assets + Non-Current Assets
= 1,80,000 + 7,20,000 = 9,00,000
Total Liabilities = Long Term Borrowings + Long-Term Provisions + Current Liabilities
= 4,00,000 +2,00,000+1,00,000 = 7,00,000
Therefore, Shareholder's funds = Total Assets Total Liabilities
= 9,00,000 7,00,000 = 2,00,000 Long-Term Debt = Long Term Borrowings + Long-term Provisions = 4,00,000+2,00,000 = Rs 6,00,000
Therefore, Debt -equity ratio =
2,00,000
6,00,000
=3:1
(b) Current ratio =
CurrentLiabilities
CurrentAssets
(1) A bill payable of Rs. 9,000 was met on maturity will affect:
1.Trade Payable will reduce by Rs.9,000
2.Cash will reduce by Rs.9,000
Simultaneous decreases in current assets and current liabilities will improve current ratio
Issue of share of Rs.10,00,000 to vendor of machinery will affect the following
1.Increases on the balance of machinery
2.Increase in the amount of share capital
This transaction will neither affect current liabilities nor current assets.Thus ,current ratio will remain unchanged