Question : From the calculated total assets to debt ratio.
Shareholders’ funds Rs. 2,40,000
Total Debts (Liabilities) Rs. 46,00,000
Short-term debts (Current Liabilities) = Rs. 2,00,000.
Option 1: 1.5:1
Option 2: 1.05:1
Option 3: 1.52:1
Option 4: None of the above
Answer (1)
25th Jan, 2024
Correct Answer: 1.05:1
Solution :
Total Assets to debt ratio = Total Assets / Long term Debts
= 48,40,000 / 46,00,000 = 1.05 : 1
Long-term debts = total debts (Liabilities) − Short term debt (Current Liabilities)
= 48,00,000 − 2,00,000 = 46,00,000
Total assets = shareholder funds + total debts (liabilities)= 2,40,000 + 46,00,000= 48,40,000.
Hence option 2 is the correct answer.
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