Question 33 Chapter 4 of +2-B

Question 33 Chapter 4 of +2-B

II. Solvency (Long-Term) Ratio

33. (Debt Equity Ratio/Proprietary Ratio/Total Asset to Debt Ratio) Calculate

  1. Debt Equity Ratio
  2. Proprietary Ratio
  3. Total Assets to Debt Ratio
    From the following information
12% Debentures 5,00,000
Loan from HDFC2,50,000
Trade Payable3,50,000
Equity share Capital 12,50,000
Reserve2,50,000
Surplus i.e. Balance in Statement of Profit and Loss 1,50,000
Goodwill 2,50,000
Other fixed Assets17,50,000
Current Assets7,50,000

 

The solution of Question 33 Chapter 4 of +2-B: – 

(i) Debt Equity Ratio=Total Long term Debt
Shareholder’s Fund
Total Long term Debt=12% Debentures + Loan from HDFC
 =₹ 5,00,000 + ₹ 2,50,000
 =₹ 7,50,000
Shareholder’s Fund=Equity share Capital + Reserve + Surplus i.e. Balance in Statement of Profit and Loss
 =₹ 12,50,000 + ₹ 2,50,000 + ₹ 1,50,000
 =₹ 16,50,000
Debt Equity Ratio=₹ 7,50,000
₹ 16,50,000
   
 =0.45: 1

 

(ii) Proprietary Ratio=Proprietor’s Funds
Total Assets
Proprietor’s Funds=Equity share Capital + Reserve + Surplus i.e. Balance in Statement of Profit and Loss
 =₹ 12,50,000 + ₹ 2,50,000 + ₹ 1,50,000
 =₹ 16,50,000
Shareholder’s Fund=Fixed Assets + current Assets
 =₹ 17,50,000 + ₹ 7,50,000
 =₹ 25,00,000
Debt Equity Ratio=₹ 16,50,000
₹ 25,00,000
   
 =0.66 : 1

 

(iii) Total Assets to Debt Ratio=Total Assets
Long term Debt
Total Assets=Other Fixed Assets + Current Assets + Goodwill
 =₹ 17,50,000 + ₹ 7,50,000 + ₹ 2,50,000
 =₹ 27,50,000
Long term Debt=12% Debentures + Loan from HDFC
 =₹ 5,00,000 + ₹ 2,50,000
 =₹ 7,50,000
(iii) Total Assets to Debt Ratio=₹ 27,50,000
₹ 7,50,000
   
 =3.66: 1

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

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 33 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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