Calculate debt equity ratio from the following information: Rs Total Assets 15,00,000 Current Liabilities 6,00,000 Total Debts 12,00,000

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Calculate debt equity ratio from the following information:

 Rs
Total Assets15,00,000
Current Liabilities6,00,000
Total Debts12,00,000



Debt Equity Ratio = `\frac{Debt}{Equity}`
Equity = Total Asset - Total Debts
           = 15,000 - 12,000
           = 3,00,000
Debt = Total Debt - Current Liabilities
         = 12,00,000 - 6,00,000
         = 6,00,000

Debt Equity Ratio = `\frac{6,00,000}{3,00,000}`
                              = 2:1

Chapter-5 Accounting Ratios-II



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