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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
From the following, calculate (a) Debt to Equity Ratio; (b) Total Assets to Debt Ratio; and (c) Proprietary Ratio:
| 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 |
Shareholders’ Funds (Equity) = Equity Share Capital + Preference Share Capital + General Reserve + Balance in Statement of Profit and Loss
= 75,000 + 25,000 + 45,000 + 30,000 = ₹1,75,000
(a) Debt to Equity Ratio
Debt to Equity Ratio = Debentures ÷ Shareholders’ Funds = 75,000 ÷ 1,75,000 = 0.43 : 1
(b) Total Assets to Debt Ratio
Total Assets = Shareholders’ Funds + Debentures + Trade Payable + Outstanding Expenses
= 1,75,000 + 75,000 + 40,000 + 10,000 = ₹3,00,000
Total Assets to Debt Ratio = 3,00,000 ÷ 75,000 = 4 : 1
(c) Proprietary Ratio
Proprietary Ratio = Shareholders’ Funds ÷ Total Assets = 1,75,000 ÷ 3,00,000 = 0.58 : 1 (or 58.33%)
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.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.182 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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