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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Question 144 Chapter 4 of +2-B
Miscellaneous
144. From the following, calculate (a) Debt to Equity Ratio; (b) Total Assets to Debt Ratio; and (c) Proprietary Ratio:
| Rs | Rs | ||
| Equity Share Capital | 75,000 | Debentures | 75,000 |
| Preference Share Capital | 25,000 | Trade Payable | 40,000 |
| General Reserve | 45,000 | Outstanding Expenses | 10,000 |
| Balance in Statement of Profit and Loss | 30,000 |
I
| Long-term Debts | = | Rs 75,000 |
| Equity | = | Equity Share Capital + Preference Share Capital + General Reserve + Balance in Statement of Profit & Loss |
| = | Rs 75,000 + Rs 25,000 + Rs 45,000 + Rs 30,000 | |
| = | Rs 1,75,000 |
| Debt - Equity Ratio | = | Long-term Debts |
| Equity |
| Gross Profit Ratio | = | Rs. 75,000 |
| Rs 1,75,000 | ||
| = | 0.43 : 1 | |
II
| Total Assets | = | Equity Share Capital + Preference Share Capital + General Reserve + Balance in Statement of Profit & Loss + Debentures + Trade Payables + Outstanding Expenses |
| = | Rs 75,000 + Rs 25,000 +Rs 45,000 + Rs 30,000 + Rs 75,000 + Rs 40,000 + Rs10,000 | |
| = | Rs 3,00,000 | |
| Long term Debts | = | Rs 75,000 |
| Total Assets to Debts Ratio | = | Total Assets |
| Long term Debts |
| = | Rs. 3,00,000 |
| Rs 75,000 | |
| = | 4 : 1 |
III
| Shareholders' Funds | = | Equity Share Capital + Preference Share Capital + General Reserve + Balance in Statement of Profit & Loss |
| = | 75,000+25,000+45,000+30,000 | |
| = | Rs 1,75,000 | |
| Total Assets | = | Equity Share Capital + Preference Share Capital + General Reserve +Balance in Statement of Profit & Loss + Debentures + Trade Payables + Outstanding Expenses |
| = | Rs 75,000 + Rs 25,000 + Rs 45,000 + Rs 30,000 + Rs 75,000 + Rs 40,000 + Rs 10,000 | |
| = | Rs 3,00,000 |
| Proprietary Ratio | = | Shareholders' Funds |
| Total Assets |
| = | Rs. 1,75,000 |
| Rs 3,00,000 | |
| = | 0.58 : 1 |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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