Total Debt Rs. 12,00,000; Shareholders' Funds Rs. 2,00,000; Reserves and Surplus Rs. 50,000; Current Assets Rs. 5,00,000; Working Capital Rs. 1,00,000. Calculate Total Assets to Debt Ratio.

Total Debt Rs. 12,00,000; Shareholders’ Funds Rs. 2,00,000; Reserves and Surplus Rs. 50,000; Current Assets Rs. 5,00,000; Working Capital Rs. 1,00,000. Calculate Total Assets to Debt Ratio.

SOLUTION

Working Capital	Current Assets-Current Liabilities
1,00,000	5,00,000 – Current Liabilities = Rs. 4,00,000

Current Liabilities Debt	Total Debt-Current Liabilities
	12,00,000 – 4,00,000 = Rs. 8,00,000

Total Assets	Shareholders’ Funds+ Total Debt
	2,00,000 + 12,00,000 = Rs. 14,00,000

Total Assets to Debt Ratio	Total Assets / Debt
	14,00,000 / 8,00,000 = 1.75: 1