45950, Pralay - 26475, B 9. Calculate (i) Debt Equity Ratio and (ii) Proprietory Ratio from the following Balance Sheet. Liabilities Equity share capital General reserve 8% preference share capital 8% Debenture Account Loan from IDBI Current Liabilities Balance Sheet as at 31.3.22 Assets Amount Rs. 1500000 200000 Goodwill Non-current assets Current assets 800000 10,00,000 Profit & Loss A/c 700000 400000 4600000 Amount Rs. 500000 2200000 1800000 100000 4600000 (Ans. Debt Equity ratio = 29 : 25, Proprietory ratio = 5:9].
plz answer with explaination
with understable concept.
plz answer with explaination
with understable concept.
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To calculate the Debt Equity Ratio, we need to find the total liabilities and the equity of the company.
Total liabilities:
- Equity share capital: Rs. 15,00,000
- General reserve: Rs. 2,00,000- 8% preference share capital: Rs. 5,00,000
- 8% Debenture Account: Rs. 22,00,000
- Loan from IDBI: Rs. 18,00,000
- Current Liabilities: Rs. 1,00,000
Total liabilities = 15,00,000 + 2,00,000 + 5,00,000 + 22,00,000 + 18,00,000 + 1,00,000
= Rs. 63,00,000
Equity = Equity share capital + General reserve
= Rs. 15,00,000 + Rs. 2,00,000
= Rs. 17,00,000
(i) Debt Equity Ratio = Total liabilities / Equity
= Rs. 63,00,000 / Rs. 17,00,000
= 29 : 25
(ii) Proprietary Ratio = Equity / Total assets
Total assets = Non-current assets + Current assets
= Rs. 8,00,000 + Rs. 10,00,000
= Rs. 18,00,000
Proprietory Ratio = Rs. 17,00,000 / Rs. 18,00,000
= 5 : 9
Therefore, the Debt Equity Ratio is 29 : 25 and the Proprietory Ratio is 5 : 9.
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Answer:
Sure, let's break down the calculation of Debt Equity Ratio and Proprietary Ratio step by step.
**Given:**
- Equity share capital: Rs. 1500000
- General reserve: Rs. 200000
- 8% preference share capital: Rs. 800000
- 8% Debenture: Rs. 1000000
- Loan from IDBI: Rs. 460000
**Calculation:**
**(i) Debt Equity Ratio:**
\[ Debt Equity Ratio = \frac{{Long-Term Debt}}{{Equity}} \]
\[ Long-Term Debt = \text{{8% Debenture + Loan from IDBI}} = 1000000 + 460000 = 1460000 \]
\[ Equity = \text{{Equity share capital + General reserve + Preference share capital}} \]
\[ Equity = 1500000 + 200000 + 800000 = 2500000 \]
\[ Debt Equity Ratio = \frac{{1460000}}{{2500000}} = \frac{{29}}{{50}} \]
So, Debt Equity Ratio = 29:50
**(ii) Proprietary Ratio:**
\[ Proprietary Ratio = \frac{{Shareholder's Funds}}{{Total Assets}} \]
\[ Shareholder's Funds = \text{{Equity + General reserve + Preference share capital}} \]
\[ Shareholder's Funds = 1500000 + 200000 + 800000 = 2500000 \]
\[ Total Assets = \text{{Non-current assets + Current assets}} \]
\[ Total Assets = 2200000 + 1800000 = 4000000 \]
\[ Proprietary Ratio = \frac{{2500000}}{{4000000}} = \frac{{5}}{{8}} \]
So, Proprietary Ratio = 5:8
Therefore, Debt Equity Ratio is \(29:50\) and Proprietary Ratio is \(5:8\).
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