Capital Employed  Rs.8,00,000; Shareholders’ Funds Rs. 2,00,000. Calculate Debt to Equity Ratio.

SOLUTION Shareholders’ Funds = 2,00,000Capital Employed = 8,00,000Long- Term Debts = Capital Employed − Shareholders’ Funds= 8,00,000 − 2,00,000= 6,00,000 Debt equity ratio = Long-term Debt  / equity= 6,00,000 / 2,00,000=…

Continue ReadingCapital Employed  Rs.8,00,000; Shareholders’ Funds Rs. 2,00,000. Calculate Debt to Equity Ratio.

Total Assets Rs. 12,50,000; Total Debts Rs. 10,00,000; Current Liabilities Rs. 5,00,000. Calculate Debt to Equity Ratio.

SOLUTION Total Assets = 12,50,000Total Debts = 10,00,000Equity = Total Assets − Total Liabilities= 12,50,000 − 10,00,000= 2,50,000 Long-term Debts = Total Debts − Current Liabilities= 10,00,000 − 5,00,000= 5,00,000 Debt equity…

Continue ReadingTotal Assets Rs. 12,50,000; Total Debts Rs. 10,00,000; Current Liabilities Rs. 5,00,000. Calculate Debt to Equity Ratio.

From the following information, calculate Debt to Equity Ratio:

ParticularsAmount(Rs.)10,000 Equity Shares of Rs. 10 each fully paid1,00,0005,000; 9% Preference Shares of Rs. 10 each fully paid50,000General Reserve 45,000Surplus, i.e., Balance in Statement of Profit and Loss20,00010% Debentures75,000Current Liabilities50,000 SOLUTION Long-Term Debt = Debentures =  Rs. 75,000Shareholder’s Funds…

Continue ReadingFrom the following information, calculate Debt to Equity Ratio:

Total Assets Rs. 2,60,000; Total Debts Rs. 1,80,000; Current Liabilities Rs. 20,000. Calculate Debt to Equity Ratio. 

SOLUTION Total Debts = 1,80,000Current Liabilities = 20,000Long-term Debts = Total Debts − Current Liabilities= 1,80,000 − 20,000= 1,60,000 Equity = Total Assets − Total Liabilities= 2,60,000 − 1,80,000= 80,000 Debt equity…

Continue ReadingTotal Assets Rs. 2,60,000; Total Debts Rs. 1,80,000; Current Liabilities Rs. 20,000. Calculate Debt to Equity Ratio. 

Calculate Debt to Equity Ratio: Equity Share Capital Rs. 5,00,000; General Reserve Rs. 90,000; Accumulated Profits Rs. 50,000; 10% Debentures Rs. 1,30,000; Current Liabilities Rs. 1,00,000.

SOLUTION Equity = Equity Share Capital + General Reserve + Accumulated Profits= 5,00,000 + 90,000 + 50,000= 6,40,000 Debt = 10% Debentures= 1,30,000Debt equity ratio = Debt  / equity= 1,30,000 /…

Continue ReadingCalculate Debt to Equity Ratio: Equity Share Capital Rs. 5,00,000; General Reserve Rs. 90,000; Accumulated Profits Rs. 50,000; 10% Debentures Rs. 1,30,000; Current Liabilities Rs. 1,00,000.

From the following calculate: (i) Current Ratio; and (ii) Quick Ratio:

 ParticularsAmount(Rs.) ParticularsAmount(Rs.)Total Debt6,00,000Long-term Borrowings2,00,000Total Assets8,00,000Long-term Provisions2,00,000Fixed Assets (Tangible)3,00,000Inventories95,000Non-current Investment50,000Prepaid Expenses5,000Long-term Loans and Advances50,000  SOLUTION (i) Current ratioCurrent Assets = Total Assets - Fixed Assets – Non - Current Investment Long term Loans and Advances = 8,00,000 -…

Continue ReadingFrom the following calculate: (i) Current Ratio; and (ii) Quick Ratio:

Following is the Balance Sheet of Crescent Chemical Works Limited as at 31st March, 2019:

ParticularsNoteNo.Amount(Rs.)I. EQUITY AND LIABILITIES :1. Shareholder's Funds : (a) Share Capital 70,000(b) Reserves and Surplus 35,000  2. Non-Current Liabilities : Long-term Borrowings 25,000  3. Current Liabilities : (a) Short-term Borrowings 3,000(b) Trade Payables (Creditors) 13,000(b) Short-term Provisions: Provision for Tax 4,000Total 1,50,000II. ASSETS : 1.…

Continue ReadingFollowing is the Balance Sheet of Crescent Chemical Works Limited as at 31st March, 2019:

Capital Employed Rs. 10,00,000; Fixed Assets Rs. 7,00,000; Current Liabilities Rs. 1,00,000. There are no Long-term Investments. Calculate Current Ratio.

SOLUTION Capital Employed = 10,00,000Fixed Assets = 7,00,000 Current Assets = Capital Employed + Current Liabilities − Fixed Assets= 10,00,000 + 1,00,000 − 7,00,000= 4,00,000 Current ratio = Current Assets /…

Continue ReadingCapital Employed Rs. 10,00,000; Fixed Assets Rs. 7,00,000; Current Liabilities Rs. 1,00,000. There are no Long-term Investments. Calculate Current Ratio.

X Y Z Limited’s Inventory is Rs. 3,00,000. Total Liquid Assets are Rs. 12,00,000 and Quick Ratio is 2: 1. Work out Current Ratio.

SOLUTION Quick ratio = Quick Assets / Current assets= 2: 1Quick Assets = 12,00,000Current liabilities Quick assets / 2 = 12,00,000 / 2= 6,00,000Current Assets = Quick Assets + Stock=…

Continue ReadingX Y Z Limited’s Inventory is Rs. 3,00,000. Total Liquid Assets are Rs. 12,00,000 and Quick Ratio is 2: 1. Work out Current Ratio.