12th | Accounting Ratio | Question No. 51 To 55 | Ts Grewal Solution 2023-2024

Question 51:

From the following Balance Sheet of ABC Ltd. as at 31st March, 2022, Calculate Debt to Equity Ratio:

Particulars		`
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

Answer:

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

Total Assets to Debt Ratio

Question 52:

Calculate Total Assets to Debt Ratio from the following information:
Long-term Debts ` 4,00,000; total Assets ` 7,70,000.

Answer:

Long-term Debts = 4,00,000

Total Assets = 7,70,000

Total assets to Debt ratio= Total assets / Debt =7,70,000/4,00,000=1.925:1

Question 53:

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

Answer:

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

Question 54:

Total Debt ` 60,00,000; Shareholders' Funds ` 10,00,000; Reserves and Surplus ` 2,50,000; Current Assets ` 25,00,000; Working Capital ` 5,00,000. Calculate Total Assets to Debt Ratio.

Answer:

Total Assets to Debt Ratio =  Total Assets/Long Term Debt
Working Capital = Current Assets – Current Liabilities
           5,00,000 = 25,00,000 – Current Liabilities
              Current Liabilities = ` 20,00,000
Long Term Debts = Total Debt – Current Liabilities
                              = 60,00,000 – 20,00,000
                              = ` 40,00,000
Total Assets = Total Liabilities = Total Debt + Shareholders’ Funds
                     = 60,00,000 + 10,00,000
                    = ` 70,00,000
Total Assets to Debt Ratio = 70,00,000/40,00,000 = 7 : 4 or 1.75 : 1

Question 55:

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

Answer:

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 = ` 20,00,000
Long Term Debt = Total Debt – Current Liabilities
                              = 15,00,000 – 5,00,000
                              = ` 10,00,000

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