Question
Compute Total Assets to Debt Ratio from the following information:
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Answer
Total Assets to Debt Ratio $=\frac{\text{Total Assets}}{\text{Debt (i.e., Long Term Debts)}}$
Long Term Debts = Total Debts - Creditors - Bills Payables - Short term Borrowings - Outstanding Exp.
= ₹ 32,00,000 - ₹ 2,50,000 - ₹ 20,000 - ₹ 1,00,000 - ₹ 30,000
= ₹ 28,00,000
Total Assets to Debt Ratio $=\frac{35,00,000}{28,00,000}=1.25:1$
Long Term Debts = Total Debts - Creditors - Bills Payables - Short term Borrowings - Outstanding Exp.
= ₹ 32,00,000 - ₹ 2,50,000 - ₹ 20,000 - ₹ 1,00,000 - ₹ 30,000
= ₹ 28,00,000
Total Assets to Debt Ratio $=\frac{35,00,000}{28,00,000}=1.25:1$
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