On the basis of following data the Debt Equity Ratio of a Company will be Equity Share Capital Rs 5 ...........

General Accounting Principles Ratio analysis

On the basis of following data, the Debt-Equity Ratio of a Company will be:

Equity Share Capital Rs 5,00,000; General Reserve Rs 3,20,000; Preliminary Expenses Rs 20,000; Debentures Rs 3,20,000; Current Liabilities Rs 80,000.

1 : 2

52:1

4:1

37:1

Equity Share Capital Rs 5,00,000; General Reserve Rs 3,20,000; Preliminary Expenses Rs 20,000; Debentures Rs 3,20,000; Current Liabilities Rs 80,000.

debt =(Debentures) Rs 3,20,000

Equity= (Equity Share Capital)Rs 5,00,000 + (General Reserve ) Rs 3,20,000 - (Preliminary Expenses) Rs 20,000 =Rs.8,00,000

debt to equity ratio= debt/ equity

=Rs. 3,20,000/Rs.8,00,000

= 4 : 1(ANSWER)

By: Abhipedia

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