Question : From the calculated total assets to debt ratio. Shareholders’ funds Rs. 2,40,000 Total Debts (Liabilities) Rs. 46,00,000 Short-term debts (Current Liabilities) = Rs. 2,00,000.
Option 1: 1.5:1
Option 2: 1.05:1
Option 3: 1.52:1
Option 4: None of the above
Correct Answer: 1.05:1
Solution : Total Assets to debt ratio = Total Assets / Long term Debts = 48,40,000 / 46,00,000 = 1.05 : 1 Long-term debts = total debts (Liabilities) − Short term debt (Current Liabilities) = 48,00,000 − 2,00,000 = 46,00,000 Total assets = shareholder funds + total debts (liabilities)= 2,40,000 + 46,00,000= 48,40,000. Hence option 2 is the correct answer.
Question : Shareholders' Funds Rs. 14,00,000; Total Debts (Liabilities) Rs. 18,00,000; Current Liabilities Rs. 2,00,000. Total Assets to Debt Ratio will be
Option 1: 3:2
Option 2: 2:1
Option 3: 2.5:1
Option 4: None of the above.
Question : Which of the following statements is false?
Option 1: Total Assets = Fixed Assets + Non-current Investments + Current Assets
Option 2: Long-term Borrowings or Debt = Total Borrowing - Short-term Borrowings
Option 3: Total Assets = Shareholders Funds + Long term Borrowings + Short term Borrowings + Other Current liabilities
Question : Which is the debt-to-equity ratio?
Option 1: Long Term Debts/Shareholder’s Funds
Option 2: Short Term Debts/Equity Capital
Option 3: Shareholder’s Funds/Total Assets
Option 4: Total Assets/Long-term Debts
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