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    Question

    Refer to the following Date for Q2-Q3 Balance Sheet Amount (Rs.) Fixed Assets 3,00,000 Cash 60,000 Inventory 40,000 Total Assets 4,00,000     Share Capital 2,00,000 Long term Debt 1,64,000 Trade Payables 36,000 Total Equity and Liabilities 4,00,000

    Calculate the Debt/Equity Ratio of the company from the

    above information.
    A 0.50 Correct Answer Incorrect Answer
    B 0.82 Correct Answer Incorrect Answer
    C 1.00 Correct Answer Incorrect Answer
    D 1.22 Correct Answer Incorrect Answer
    E 2.00 Correct Answer Incorrect Answer

    Solution

    Debt/Equity = Debt/Equity                         = 1,64,000/200,000                         = 0.82 times

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