Question

Total assets 260000 , total debt 180000 , current liabilities 20000 . Calculate debt to equity ratio

Answer 1

Answer:

Debt Equity Ratio = Debt / Equity

= 1,80,000 / 2,40,000

= 0.75 : 1

Explanation:

Equity = Assets - Liabilities

= 2,60,000 - 20,000 = 2,40,000

Answer 2

$\sf\red{Debt = Total \: debts - Current \: liabilities}$

$\implies$$\sf{1,80,000-20,000}$

$\implies$$\sf{1,60,000}$

$\sf\red{Equity = Total \: assets - Total \: debts}$

$\implies$$\sf{2,60,000-1,80,000}$

$\implies$$\sf{80,000}$

$\sf\red{Debt \: to \: equity \: ratio = \frac{Debt}{Equity}}$

$\implies$$\sf{\frac{160000}{80000} }$

$\implies$$\sf{2:1}$