From the following balance sheet of ABC Co.Ltd. as on March 31. 2015. Calculate debt equity ratio :

Explanation

Debt-Equity Ratio `=("Debts")/("Equity")`
Debt = Long-term borrowing + Other long-term liabilities + Long-term provisions
= Rs. 4,00,00 + Rs. 40,000 + Rs. 60,000
= Rs. 5,00,000
Equity = Share capital + Reserves and surplus + Money received against share warrants
= Rs. 12,00,000 + Rs. 2,00,000 + Rs. 1,00,000
= Rs 15,00,000
Alternatively
Equity = Non-current assets + Working capital - Non-current
liabilities = Rs. 18,00,000 + Rs. 2,00,000 - Rs. 5,00,000
=Rs. 15,00,000
Working Capital = Current assets - Current liabilities
= Rs. 7,00,00 Rs.5,00,000
=Rs. 2,00,000
Debt Equity Ratio `=(50,0000)/(1,50,0000)=0.33:1`