Question : Which of the following statements is correct?

Option 1: Debt to equity ratio indicates the proportion of funds which are acquired by long-term borrowings in comparison to shareholder's funds.

Option 2: The debt to equity ratio is calculated to ascertain the soundness of the long-term financial policies of the firm.

Option 3: Debt Equity Ratio $=\frac{\text { Debt }}{\text { Equity }}$

Option 4: All of the above

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

Question : Which of the following statements is incorrect?

Option 1: Decrease in Long term Debts decreases the Debt-Equity Ratio

Option 2: Increase in Long term Debts,increases the Debt-Equity Ratio

Option 3: Decrease in Shareholder’s Funds increases the Debt-Equity Ratio

Option 4: None of the above

Question : Which of the following statements is incorrect?

Option 1: Decrease in Long term Debts decreases the Debt-Equity Ratio

Option 2: Increase in Long term Debts,increases the Debt-Equity Ratio

Option 3: Decrease in Shareholder’s Funds increases the Debt-Equity Ratio

Option 4: None of the above

Question : Which of the following statements is incorrect?

Option 1: Debt equity ratio is calculated to assess the ability of the firm to meet its long-term liabilities.

Option 2: If the debt-equity ratio is more than that, it shows a rather risky financial position from the long-term point of view.

Option 3: debt-equity ratio of 1: 1 is considered safe.

Option 4: A high debt-equity ratio is a danger signal for long-term lenders.