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Querist : Anonymous

Querist : Anonymous (Querist)

10 March 2016 In the Blance sheet of a firm , the debt equity ratio is 2:1. The amount of long term sources is Rs 12 lac . what is the amount of thangilble net worth of the firm?
A. Rs 12 lac
B. Rs 8 lac
C. Rs 4 lac
D. Rs 2lac
Answer is given B . Pls explain how it is.

Querist : Anonymous

Querist : Anonymous (Querist)

10 March 2016 Dear sir,

Pls solve that problem with explanation

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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14 July 2024 To find the tangible net worth of the firm, we need to calculate both the total debt and the equity:

Given:
- Debt equity ratio = 2:1
- Long term sources (equity) = Rs 12 lac

### Step-by-Step Calculation:

1. **Identify Debt and Equity:**

Let's denote:
- Debt = D
- Equity = E

From the debt equity ratio:
\[
\frac{D}{E} = \frac{2}{1}
\]

This implies:
\[
D = 2 \times E
\]

2. **Calculate Debt (D):**

Since the equity is given as Rs 12 lac:
\[
D = 2 \times 12 \text{ lac}
\]
\[
D = 24 \text{ lac}
\]

So, the total debt (D) is Rs 24 lac.

3. **Calculate Tangible Net Worth:**

Tangible net worth is typically calculated as the equity minus intangible assets, if any. Given the options provided, it seems the question intends to find the equity portion (which is the tangible net worth in this context).

Since the equity is Rs 12 lac, and considering that tangible net worth is often used interchangeably with equity in some contexts (especially in multiple-choice questions where options are limited), we take the equity as the tangible net worth.

### Conclusion:

The given options and the calculation suggest that the tangible net worth of the firm is Rs 12 lac, which corresponds to the equity (long term sources) provided in the question. The answer B (Rs 8 lac) might be a typographical error in the options provided, as the calculation indicates the tangible net worth (equity) is Rs 12 lac. Therefore, the correct tangible net worth of the firm, based on the information given, is **Rs 12 lac**.

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