Based on following information of a company as at 31 March, 2017. Answer question.
|
Items |
Rs. |
|
Inventory |
1,00,000 |
|
Total Current Assets |
1,60,000 |
|
Shareholders Fund |
4,00,000 |
|
13% Debentures |
3,00,000 |
|
Current liabilities |
1,00,000 |
|
Net Profit before Tax |
3,51,000 |
|
Cost of Revenue from operations |
5,00,000 |
Calculate Debt Equity Ratio.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 0.75 : 1
Debt-Equity Ratio = Long-term Debts / Shareholders’ Funds
= 3,00,000 / 4,00,000
= 0.75 : 1
* Long term debts = 13% debentures