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What is the formula of Debt Equity Ratio? Also define its
importance in a firm.
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Answer / navesh joshi
Debt Equity Ratio = Debt/Equity
Debt= Long term borrowed funds
equity= share capital+ preference share capital +
reserves&surplus - fictitious asset
the importance of this ratio is to judge the long solvency
position of a company and capital structure.
| Is This Answer Correct ? | 23 Yes | 0 No |
Answer / rahul sharma
Debt Equity Ratio = Debt/Equity
Debt= Long term borrowed funds
Equity= share capital+ preference share capital +
reserves&surplus - fictitious asset- P&L a/c dr balance.
| Is This Answer Correct ? | 4 Yes | 2 No |
Answer / harish
Total Debt/Total Equity
It indicates the financial advantage of the concern(popularly
called leverage).
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / libina kutty
DEBT EQUITY RATIO = DEBT / EQUITY
IT TELLS D TOTAL DEBT OF AN ENTITY TO ITS EQUITY . IT SHOULD
BE IN THE RATIO OF 2:1. WHICH MEANS FR EVRY 2 DEBT 1 EQUITY
SHOULD BE THEIR.
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / saurabh
debt/equity ratio:
debt :(long term debt + short term debt)
equity : (common share + pref share+ reserves and surplus)
it is used to assess the
1)riskiness
2)used by banks to check the existing composition of debt -
should be on the lower side to leave scope for more debt
| Is This Answer Correct ? | 1 Yes | 1 No |
Answer / suresh
Debt Equity Radio : Debt/Equity
Debt: Long term Loans, Overdraft , Borrowings
Equity : share Capital and preference share Capital +
Reserve and Surplus - if Any loss
| Is This Answer Correct ? | 0 Yes | 3 No |
Q13. Journalise the following transactions: Proprietor withdrew for private use Rs.4000/- from bank and 6000/- cash. Goods Costing Rs.5000 was burnt by fire. Purchase Machinery for cash Rs.150000/- and paid Rs.2000/- on its Installation. Charge 5% Depreciation on building costing Rs.200000/- and 8% Depreciation on Furniture costing Rs.5000/-. Prepaid Salary Rs2000/- Kapil who owed us Rs20000/- become insolvent and nothing is received from his estate.
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