Financial Statements

Ratios

Easy

The ideal Debt Equity Ratio is :

1 : 1

2 : 1

4 : 1

5 : 1

✅ Correct Option: 2

The ideal Debt-Equity Ratio is generally considered to be 2 : 1. It indicates a balanced capital structure where long-term debt is double the shareholders' funds, which is considered safe for long-term solvency.

2022: 23 Aug Shift 2

For calculating EPS, the following order will be followed.

(A) Calculate number of equity shares

(B) Calculate earning available for equity share holders

(D) Compute EPS

Choose the correct answer from the options given below :

2025: 3 June Shift 2

Compute Earning per share from following information

Net profit after tax but before dividend	1,75,000
Equity shares of Rs. 10 each	Rs. 7,00,000
Dividend declared @15%
Market price of a share	Rs.13

2026: 6 June Shift 1

Given the following information:

Revenue from Operations Rs. 3,40,000

Cost of Revenue from Operations Rs. 1,20,000

Selling expenses Rs. 80,000

Administrative Expenses Rs. 40,000

Calculate the operating ratio.

2025: 14 May Shift 1

Which of the following statements are True about ratio analysis-

(A) A ratio reflects quantitative and qualitative aspects of results.

(B) Long-term borrowings are concerned about the ability of a firm to discharge its obligations to pay interest and repay the principal amount

(D) Ratios help in comparisons of a firm's results over a number of accounting periods as well as with other business enterprises.

Choose the correct answer from the options given below:

2022: 8 Aug Shift 2

A low stock turnover ratio indicates:

2026: 21 May Shift 2

Match the LIST-I with LIST-II

LIST-I		LIST-II
A.	The ratio provides a measure of the capacity of the business to meet its short-term obligations without any flaw.	I. Total Assets to Debt Ratio
B.	This ratio measures the extent of the coverage of long-term debts by assets.	II. Interest Coverage Ratio
C.	This ratio indicates the number of times receivables are turned over and converted into cash in an accounting period.	III. Quick Ratio
D.	It is a ratio which deals with the servicing of interest on loans. It is a measure of security of interest payable on long-term debts.	IV. Trade Receivables Turnover Ratio

Choose the correct answer from the options given below:

The ideal Debt Equity Ratio is :

Solution

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