From the following information, calculate Debt Equity Ratio, Total Assets to Debt Ratio, Properietory Ratio and Debt to Capital Employed Ratio :

Explanation

(i) Debt - Equity Ratio `=("Debts")/("Equity")`
Debt = Long-term borrowing = Rs. 1,50,000
Equity = Share capital + Reserves and surplus
= Rs. 4,00,000 + Rs. 1,00,000 = Rs. 5,00,000
Debt-Equity Ratio ` = (Rs. 1,50,000)/(Rs. 5,00,000)=0.3:1`
(ii) `"Total Assets to Debt Ratio" =("Total assets")/("Long-term debts")`
Total = Fixed assets + Non-current investment + Current assets
= Rs. 4,00,000 + Rs. 1,00,000 + Rs. 2,00,000 = Rs. 7,00,000
Long-term Debt = Rs. 1,50, 000
`"Total Asset to Debt Ratio" =(Rs. 7,00,000)/(Rs. 1,50,000)=4.67:1`
(iii) `"Properietary" = or ("Shareholders' Funds")/("Total Assets")`
`=(Rs. 5,00,000)/(Rs. 7,00,000)=0.71:1`
(iv) `"Debt to Capital Employed Ratio" =("Long-term debts")/("Capital Employed")`
Capital Employed = Shareholders's Funds + Long-term borrowings
= Rs. 5,00,000 + Rs. 1,50,000
= Rs. 6,50,000
`"Debt to capital to Capital Employed Ratio" =("Long-term debts")/("Capital Employed")`
`=(Rs. 1,50,000)/(Rs. 6,50,000)` =0.23:1