On the basis of following information received from a firm its Debt Total AssetsRatio will be Workin...........

On the basis of following information received from a firm, its Debt- Total AssetsRatio will be :

Working Capital Rs3,20,000; Current Liabilities Rs1,40,000; Fixed Assets Rs2,60,000; Debentures Rs2,10,000; Long Term Bank Debt Rs78,000.

40%

60%

30%

70%

-Total Asset = Fixed Assets + Current Assets (Current laibilties + Working capital)

Rs3,20,000 + Rs2,60,000 + Rs 1,40,000 = Rs 7,20,000

- Total Debt includes both Debentures and Long-Term Bank Debt: Rs2,10,000 + Rs78,000 = Rs2,88,000.

- The Debt - Total AssetsRatio Formula is (Total Debt/Total Assets) x 100.

- Substituting the values: (Rs2,88,000 / Rs 7,20,000) x 100 = 40%,

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