Question

K ltd furnished the following information
9%. preference share capital RS 6,00,000 12%.
Debentures Rs 4,00,000 equity shareholders
fund 25,00,000 The capital Gearing Ratio
of k ltd was​

Answer 1

Answer:

Gearing Ratio= 0.04

Explanation:

Gearing Ratio= long term debt + short term debt / equity shareholder.

Gearing Ratio= preference share capital + debenture / equity shareholder.

Gearing Ratio= 6,00,000 + 4,00,000 / 25,00,000.

Gearing Ratio = 10,00,000 / 25,00,000.

Gearing Ratio= 0.04