from the following calculate debt equity ratio
equity share capital 150000
pref. share capital 50000
general reserve 100000
accumulated profits 60000
debentures 150000
creditors 80000
expenses payable 20000
preliminary expenses not written off 10000
the formula is:
total debt/ shareholders funds
the answer is 3:7
please also show the calculation of total debt and shareholders funds.
thanks..
Debt - 150000
Shareholders fund - 150000+50000+100000+60000-10000 ( fictious assests) =350000
Debt/shareholders fund = 150000/350000= 3/7
Nisha's view is absolutly correct
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