Read the following information and answer the question.
| PARTICULARS | AMOUNT (₹) |
| Equity share capital | 15,00,000 |
| General reserve | 10,00,000 |
| Profit and loss balance ( negative) | 1,00,000 |
| Debentures | 10,00,000 |
| Loan from bank | 7,00,000 |
| Current liabilities | 4,00,000 |
| Goodwill | 5,00,000 |
| Other non-current assets | 22,00,000 |
| Current assets | 18,00,000 |
Calculate the total assets to debt ratio.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- 2.65:1.
* Total assets = Goodwill + other current assets + current assets
= 5,00,000 + 22,00,000 + 18,00,000
= ₹45,00,000
* Long term debts = Debentures + loan from bank
= 10,00,000 + 7,00,000
= ₹17,00,000
Total assets to Debt Ratio = Total assets/Long-term debts
= 45,00,000/ 17,00,000
= 2.65:1