Question : Fixed Assets (Gross) RS. 10,00,000; Accumulated Depreciation RS. 5,00,000; Non-Current Investments RS. 50,000; Long-term Loans and Advances RS. 2,00,000; Current Assets RS. 2,50,000; Current Liabilities RS. 10,00,000; Long-term Borrowings RS. 3,25,000; Long-term Provisions RS. 2,75,000. Total Assets to Debt Ratio will be
Option 1: 3:2
Option 2: 5:3
Option 3: 7:5
Option 4: 4:1
Correct Answer: 5:3
Solution :
Answer =
5:3
Total assets to debt ratio=$\frac{\text {Total Assets}}{\text {Debt}}$=$\frac{10,00,000}{6,00,000}$=5:3.
Total assets= Fixed assets-accumulated dep+ non-current investment=10,00,000-5,00,000+50,000+2,00,000+2,50,000=5,50,000+2,00,000+2,50,000=10,00,000.
Debt= Long-term borrowings+ longterm provision= 3,25,000+2,75,000= 6,00,000.
Hence, the correct option is 2.
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