Question : Calculate Debt – Equity Ratio from the following information.
Total Assets – Rs.9,00,000
Total Debt – Rs.5,00,000
Current Liabilities – Rs.2,00,000
Option 1: 0.6:1
Option 2: 0.75:1
Option 3: 0.5:1
Option 4: 0.25:1
Correct Answer: 0.75:1
Solution : Debt –Equity Ratio = Long term Debt/Shareholder’s Fund = Rs.3,00,000/Rs.4,00,000 = 0.75:1.
Long term Debt = Total Debt - Current Liabilities = Rs.5,00,000 - Rs.2,00,000 = Rs.3,00,000.
Shareholder’s Fund = Total Assets - Total Debt = Rs.9,00,000 - Rs.5,00,000 = Rs.4,00,000. Hence, the correct option is 2.
Question : Total Debts Rs. 15,00,000; Current Liabilities Rs. 5,00,000; Capital Employed Rs. 15,00,000. Calculate Total Assets to Debt Ratio.
Option 1: 3:2
Option 2: 2.5:1
Option 3: 2:1
Option 4: None of the above
Question : Fixed Assets (Gross) RS. 10,00,000; Accumulated Depreciation RS. 5,00,000; Non-Current Investments RS. 50,000; Long-term Loans and Advances RS. 2,00,000; Current Assets RS. 2,50,000; Current Liabilities RS. 10,00,000; Long-term Borrowings RS. 3,25,000; Long-term Provisions RS. 2,75,000. Total Assets to Debt Ratio will be
Option 2: 5:3
Option 3: 7:5
Option 4: 4:1
Question : A firm has a Current Ratio of 3.5: 1 and a Quick Ratio of 2: 1. If its inventory is Rs.75,000, total current assets and total current liabilities are
Option 1: Current assets Rs 2,16,000 and current liabilities Rs 48,000
Option 2: Current assets Rs 1,08,000 and current liabilities Rs 24.000
Option 3: Current assets Rs 1,75,000 and current liabilities Rs 50,000
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