How debt to capital employed ratio calculated?

Both options 1 and 2

The Debt to capital employed ratio refers to the ratio of long-term debt to the total of external and internal funds (capital employed or net assets).
It is computed as follows: Debt to Capital Employed Ratio = Long-term Debt/Capital Employed (or Net Assets).
Capital employed is equal to the long-term debt + shareholders’ funds. Alternatively, it may be taken as net assets which are equal to the total assets.