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Calculate the Debt to Equity Ratio from the following information:
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| Fixed Assets (Gross) | 8,40,000 | Current Assets | 3,50,000 |
| Accumulated Depreciation | 1,40,000 | Current Liabilities | 2,80,000 |
| Non-Current Investments | 14,000 | 10% Long-term Borrowings | 4,20,000 |
| Long-term Loans and Advances | 56,000 | Long-term Provisions | 1,40,000 |
Debt = Long-term Borrowings + Long-term Provisions = 4,20,000 + 1,40,000 = ₹5,60,000
Total Assets = Net Fixed Assets + Non-Current Investments + Long-term Loans and Advances + Current Assets
= (8,40,000 − 1,40,000) + 14,000 + 56,000 + 3,50,000 = ₹11,20,000
Total Debts (Total Liabilities other than Equity) = Long-term Borrowings + Long-term Provisions + Current Liabilities
= 4,20,000 + 1,40,000 + 2,80,000 = ₹8,40,000
Equity = Total Assets − Total Debts = 11,20,000 − 8,40,000 = ₹2,80,000
Debt to Equity Ratio = Debt ÷ Equity = 5,60,000 ÷ 2,80,000 = 2:1
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.40 - 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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