Particulars | Amount (Rs.) |
I. EQUITY AND LIABILITIES | |
1. Shareholder’s Funds | |
(a) Share Capital: | |
(i) Equity Share Capital – 5,00,000 | |
(ii) 10% Preference Share Capital – 5,00,000 | 10,00,000 |
(b) Reserves and Surplus – | 2,40,000 |
2. Non-Current Liabilities | |
Long-term Borrowings (Debentures) | 2,50,000 |
3. Current Liabilities : | |
(a) Trade Payables | 4,30,000 |
(b) Other Current Liabilities | 20,000 |
(c) Short-term Provisions: Provision for Tax | 3,00,000 |
Total | 22,40,000 |
II. ASSETS | |
1. Non-Current Assets | |
Fixed Assets: | |
(i) Tangible Assets | 6,40,000 |
(ii) Intangible Assets | 1,00,000 |
2. Current Assets | |
(a) Inventories | 7,50,000 |
(b) Trade Receivables | 6,40,000 |
(c) Cash and Cash Equivalents | 1,10,000 |
Total | 22,40,000 |
SOLUTION
Long-term Debt = Debentures = 2,50,000
Equity = Equity Share Capital + 10% Preference Share Capital + Reserves and Surplus
= 5,00,000 + 5,00,000 + 2,40,000
= 12,40,000
Debt equity ratio = Long-term Debt / equity
= 2,50,000 / 12,40,000
= 0.2: 1