Total Debt Rs. 15,00,000; Current Liabilities Rs. 5,00,000; Capital Employed Rs. 15,00,000. Calculate Total Assets to Debt Ratio. 

SOLUTION

Total Assets to Debt Ratio =  Total Assets / Long Term Debt

Capital Employed = Total Assets – Current Liabilities
15,00,000 = Total Assets – 5,00,000
Total Assets = Rs. 20,00,000

Long Term Debt = Total Debt – Current Liabilities
= 15,00,000 – 5,00,000
= Rs. 10,00,000

Total Assets to Debt Ratio = 20,00,000 / 10,00,000 
= 2: 1

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