Question 27 Chapter 4 of +2-B

II. Solvency (Long-Term) Ratio

27. (Debt Equity Ratio) From the following calculate the Debt equity ratio.

 ₹ Preference share capital 2,00,000 Equity share capital 4,00,000 Capital Reserve 1,00,000 Statement of Profit & Loss 1,00,000 14% Debenture 2,00,000 Unsecured loans 1,00,000 Creditors 40,000 Bills payable 20,000 Provision for taxation 10,000 Output IGST 5,000 Output CGST 7,500 Output SGST 7,500

## The solution of Question 27 Chapter 4 of +2-B: –

 Debt Equity Ratio = Debt Shareholders Funds
 Debt = 10% Dentures + Unsecured loans = ₹ 2,00,000 + ₹ 1,00,000 = ₹ 3,00,000 Shareholders Funds = Preference share capital + Equity share capital + capital Reserve + Surplus in Statement of Profit & Loss = ₹ 2,00,000 + ₹ 4,00,000 + ₹ 1,00,000 + ₹ 1,00,000 = ₹ 8,00,000
 Debt Equity Ratio = ₹ 3,00,000 ₹ 8,00,000 = 0.375: 1

What are Liquidity Ratios – Formulas and Examples

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Also, Check out the solved question of previous Chapters: –