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Share capital Rs. 4,00,000; Reserves and surplus Rs.1,00,000; Long-term borrowings Rs. 2,00,000; Fixed assets Rs. 4,00,000; Non-current investments Rs. 1,00,000; Current Assets Rs. 2,00,000. From the given information, the Total Assets to Debt Ratio will be:

Solution

✅ Correct Option: 1

Total assets =4,00,000+1,00,000+2,00,000=Rs.7,00,000=4{,}00{,}000+1{,}00{,}000+2{,}00{,}000=\text{Rs.}7{,}00{,}000.

Debt here means long-term debt =Rs.2,00,000=\text{Rs.}2{,}00{,}000.

Total Assets to Debt Ratio =7,00,0002,00,000=3.5:1=\frac{7{,}00{,}000}{2{,}00{,}000}=3.5:1.

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