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From the following, calculate the Debt to Capital Employed Ratio: 10% Preference Share Capital ₹5,00,000; Equity Share Capital ₹15,00,000; Securities Premium ₹1,00,000; Reserves and Surplus ₹2,00,000; 9% Loan from IDBI ₹30,00,000.
Capital Employed = 10% Preference Share Capital + Equity Share Capital + Reserves and Surplus + 9% Loan from IDBI
= 5,00,000 + 15,00,000 + 2,00,000 + 30,00,000 = ₹52,00,000
Debt = 9% Loan from IDBI = ₹30,00,000
Debt to Capital Employed Ratio = 30,00,000 ÷ 52,00,000 = 0.58:1
Note: Securities Premium is not separately added here, since it is treated as already included within the given Reserves and Surplus figure (the same convention used in an earlier question with this exact data pattern).
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.76 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
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