Accounting ratio

Debt Equity Ratio is :

• Long Term Debts/Shareholder’s Funds

• Short Term Debts/Equity Capital

• Total Assets/Long term Debts

• Shareholder’s Funds/Total Assets

The ………….. ratios provide the information critical to the long run operation of the firm.

• Liquidity

• Activity

• Solvency

• Profitability

If Debt equity ratio exceeds , it indicates risky financial position.

• 1 : 1

• 2 : 1

• 1 : 2

• 3 : 1

In debt equity ratio, debt refers to :

• Short Term Debts

• Long Term Debts

• Total Debts

• Debentures and Current Liabilities

Equity Share Capital ₹20,00,000; Reserve 5,00,000; Debentures ₹10,00,000; Current Liabilities ₹8,00,000. Debt-equity ratio will be :

• .4 ; 1

• .32 : 1

• .72 : 1

• .5 : 1

Debt equity ratio of a company is 1 : 2. Which of the following transactions will increase it:

• Issue of new shares for cash

• Redemption of Debentures

• Issue of Debentures for cash

• Goods purchased on credit