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Question : Which is the debt-to-equity ratio?

Option 1: Long Term Debts/Shareholder’s Funds 

Option 2: Short Term Debts/Equity Capital

Option 3: Shareholder’s Funds/Total Assets

Option 4: Total Assets/Long-term Debts


Team Careers360 7th Jan, 2024
Answer (1)
Team Careers360 8th Jan, 2024

Correct Answer: Long Term Debts/Shareholder’s Funds


Solution : A financial and liquidity ratio called the debt to equity ratio shows how much debt and equity a company employs.
Long-Term Debts/ Shareholder's Fund = Debt-Equity Ratio
Hence option 1 is the correct answer.

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