Shareholders’ Funds  Rs. 1,60,000; Total Debts Rs. 3,60,000; Current Liabilities Rs. 40,000. Calculate Total Assets to Debt Ratio.

SOLUTION

Total Debts = 3,60,000
Shareholders’ Funds = 1,60,000
Current Liabilities = 40,000

Total Assets = Total Debts + Shareholders’ Funds
= 3,60,000 + 1,60,000
= 5,20,000

Long-term Debts = Total Debt − Current Liabilities
= 3,60,000 − 40,000
= 3,20,000

Total assets to Debt ratio = Total assets / Debt
= 5,20,000 / 3,20,000
= 13: 8 or 1.625: 1

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