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Question : Equity Share Capital Rs.4,00,000; General Reserve Rs.2,40,000;Debentures Rs.3,20,000; Current Liabilities Rs.80,000
On the above information find out the Debt-Equity Ratio.

Option 1: 1:2

Option 2: 1:3

Option 3: 1:4

Option 4: None of the above


Team Careers360 9th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: 1:2


Solution : Debt-Equity Ratio = Debt / Equity
Debt =3,20,000
Equity = Equity Share Capital + General Reserve
Equity = 4,00,000+2,40,000=6,40,000
Debt-Equity Ratio = 3,20,000/6,40,000=1:2
Hence option 1 is the correct answer.

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