Ratio analysis query!

Originally posted by : Mayank Saini
	Hi All, I hope my question is specific and it is not a repeat question. From the CA Exam perspective can anyone please tell me which formula should I use in exam if a question comes on DEBT/EQITY Ratio. There are 3-4 formulas available in the books, which are as follows: 1) Long Term Debt/ (Shareholders Funds+ Long Term Debt) 2)Long Term Debt/ Owner's Equities 3) External Equities/ Internal Equities or All Debts/Owner's Funds Which one should one be using for Financial Management, IPCC exam?

Equity = Comapy Funds which include Share Capital and reserves

Debt = All external obligations like Debentures, loans

All debts/Owner's funds is the most appropriate formula

i am specifying what i have learned at my grad. level & ipcc

DEBT -EQUITY RATIO = LONG TERM FUNDS BORROWED BY THE COMPANY

                                           {ESC +R&S-ME +PSC} SHAREHOLDERS FUND

i am specifying what i have learned at my grad. level & ipcc

DEBT -EQUITY RATIO = LONG TERM FUNDS BORROWED BY THE COMPANY

                                           {ESC +R&S-ME +PSC} SHAREHOLDERS FUND

& IF IN EXAM ,QUESTION SPECIFICALLY PROVIDES ANY DIFFERENT RATIO e.g D/E  RATIO =DEBT / (DEBT + EQUITY)

THEN USE THE GIVEN RATIO