Read the following information and answer the question.

Calculate Debt-equity ratio.

1.2:1

The correct answer is option 3- 1.2:1.

Shareholder's funds = Share capital + reserves and surplus
                                = 30,00,000 + 10,00,000 
                                = ₹40,00,000

*Securities reserve is not included in reserves and surplus because it is already included in reserves.

Long-term debts = loan + bonds + long-term provision
                           = 20,00,000 + 25,00,000 + 3,00,000
                           = ₹48,00,000

Debt-equity ratio = Debt/Equity
                             = 48,00,000/40,00,000
                             = 1.2:1