Question

From the following information of green Star Ltd. Calculate debt to equity ratio: trade payable 3000000, other current liabilities (12.5% current asset) total debts 2800000, other qui k assets 80000, prepaid expenses 20000, trade receivables 300000, net fixed assets 3000000, long term loans and advance 160000, non current investment 40000, opening inventory 320000.
Please help me out friends...​

Answer 1

Answer:

debt = total debt - current liability

current liability = 12.5% of current asset

current asset = prepaid expenses + trade recivables + quick assets

= 20000+ 300000+ 80000

= 400000

other current liability = 125/100×400000=50000

current liability = 300000+50000=350000

equity = total asset- total debt

= (80000+350000+3000000+40000+150000)- 2800000

= 820000

debt to equity ratio = 2460000/830000= 2:1