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From The Following, Calculate (A) Debt Equity Ratio (B) Total Assets to Debt Ratio (C) Proprietary Ratio.- ACCOUNTING RATIOS
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From the following, calculate (a) Debt Equity Ratio (b) Total Assets to Debt Ratio (c) Proprietary Ratio.
Rs.
Equity Share Capital
75,000
Preference Share Capital
25,000
General Reserve
45,000
Balance in the Statement of Profits and Loss
30,000
Debentures
75,000
Trade Payables
40,000
Outstanding Expenses
10,000
(a) Debt Equity Ratio = `\frac{Debt}{Equity }`Equity Share Holders Fund = Equity Share Capital + Preference Share Capital + Accumulated Profit +General Reserve = 75,000 + 25,000 + 30,000 + 45,000Debentures (Debts) = 75,000Debt Equity Ratio = `\frac{75,000}{1,75,000 }` = `\frac{3}{7 }` = 0.43 : 1(b) Total Assets to debt Ratio = `\frac{Total Asset}{Debt }`Total Assets = Equity Share Capital + Preference share Capital + General Reserve + Accumulated Profits + Debentures + Sundry Creditors + Outstanding Expenses = 75,000 + 25,000 + 45,000 + 30,000 + 75,000 + 40,000 + 10,000= 3,00,000Total Assets to Debt Ratio = `\frac{Share Holder Fund}{Net Asset }`Proprietary Ratio = `\frac{1,75,000}{3,00,000 }` = `\frac{7}{12 }` = 7 : 12 = 0.58 : 1
answer source Question Read the source given below and answer the questions that follows: Source : The Movement in the Towns The movement started with middle-class participation in the cities. Thousands of students left government-controlled schools and colleges, headmasters and teachers resigned, and lawyers gave up their legal practices. The council elections were boycotted in most provinces except Madras, where the Justice Party, the party of the non-Brahmans, felt that entering the council was one way of gaining some power–something that usually only Brahmans had access to. The effects of non-cooperation on the economic front were more dramatic. Foreign goods were boycotted, liquor shops picketed, and foreign cloth burnt in huge bonfires. The import of foreign cloth halved between 1921 and 1922, its value dropping from Rs. 102 crore to Rs. 57 crore. In many places merchants and traders refused to trade in foreign goods or finance foreign trade. As the boycott movement spread...
A fraction becomes `9/11`, if 2 is added to both the numerator and denominator. If 3 is added to both the numerator and the denominator, it becomes `5/6`. Find the fraction. SOLUTION Let Numerator be x & Denominator be y So, Fraction is = `x/y` Given that, If 2 is added to both the numerators and denominator, fraction becomes `9/11` `"Numerators + 2"/"Denominator + 2"`= `9/11` `"x+ 2"/"y + 2"`= `9/11` 11 (`x + 2`) = 9 (`y + 2`) 11`x` + 22 = 9`y` + 18 11`x` - 9`y` = 11 - 22 11`x` - 9`y` = -4 .......(1) Also, Given that if 3 is added to both the numerator and the denominator, fraction become `5/6` `"Numerators + 3"/"Denominator + 3"`= `5/6` `"x+ 3"/"y + 3"`= `5/6` 6 (`x + 3`) = 5 (`y + 3`) 6`x` + 18 = 5`y` + 15 6`x` - 5`y` = 15 - 18 6`x` - 5`y` = - 3 .......(2) Hence, our equations are 11`x` - 9`y` = -4 .......(1) 6`x` - 5`y` = - 3 .......(2) From equation (1...
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