Satisfactory ratio between Long term Debts and Shareholder rsquo s Funds is ........

Accountancy (Phase -I & II) Ratio analysis

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Satisfactory ratio between Long-term Debts and Shareholder’s Funds is :

1 : 1

3 : 1

1 : 2

2 : 1

1.5:1

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Explanation:

Satisfactory ratio between Long-term Debts and Shareholder’s Funds reveals how much amount of fixed assets are financed by long-term funds. Usually, total investment in fixed assets must be equal to total long-term funds, i.e. ratio should be 2: 1.