Question

Shareholder fund 12,00,000 rupees total debts 800000 rupees current liabilities 200000

rupees calculate total asset to debt ratio.

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Answer 1

Answer:

Total Assets to Debt ratio = 3.33 : 1

Explanation:

Given:

• Shareholder's Funds = Rs 12,00,000

• Total Debts = Rs 8,00,000

• Current liabilities = Rs 2,00,000

To find :

• Calculate Total Assets to Debt ratio

Solution :

$\bigstar{\sf{Total\:Assets\:to\:Debt\:ratio = \frac{Total \: Assets}{Debt}}}$

Debts = Total Debts - Current liabilities

⇒ 8,00,000 - 2,00,000

⇒ 6,00,000

Debts = Rs 6,00,000

Total Assets = Shareholder's Funds + Total Debts

⇒ 12,00,000 + 8,00,000

⇒ 20,00,000

Total Assets = Rs 20,00,000

⇒ $\sf{\dfrac{Total \: Assets}{Debt}}$

⇒ $\sf{\dfrac{2000000}{600000}}$

⇒ $\sf{\dfrac{2000000}{600000} = \dfrac{3.33}{1}}$

Therefore,

Total Assets to Debt ratio = 3.33 : 1