Calculate the total assets to debt ratio from the following information.
| PARTICULARS | AMOUNT (₹) |
| Capital employed | 4000000 |
| Shareholder's funds | 2400000 |
| Current liabilities | 480000 |
Answer & explanation
Correct answer: option 2
Total assets to Debt Ratio = Total assets/Long-term debts
= 4480000/1600000
= 2.8:1
* Capital employed = shareholder's funds + long term debts
4000000 = 2400000 + long term debts
Long term debts = ₹1600000
* Total assets= Shareholder's funds + long-term debts + current liabilities
= 2400000 + 1600000 + 480000
= ₹4480000