Share capital Rs. 4,00,000; Reserves and surplus Rs. 1,00,000; Long-term borrowings Rs. 2,00,000; Fixed assets Rs. 4,00,000; Non-current investments Rs. 1,00,000; Current Assets Rs. 2,00,000. From the given information, the Total Assets to Debt Ratio will be:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 3.5:1
Total Assets to Debt Ratio = Total assets / Long-term debts. Here debt means long-term borrowings only; share capital and reserves are owners’ funds and are left out.
Total assets = Rs. 4,00,000 + Rs. 1,00,000 + Rs. 2,00,000 = Rs. 7,00,000
Long-term debts = Rs. 2,00,000
Ratio = Rs. 7,00,000 / Rs. 2,00,000 = 3.5 : 1
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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