Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Debt equity ratio
Meaning: this ratio establishes a relationship among long term debts and share holders funds.
Objective: the objective of computing this ratio is to measure the relative proportion of debt and equity in financing the assets of a firm.
Components: there are two components of this ratio which are as under:
Long term debts: which mean long term loans (whether secured or unsecured (e.g., debentures bonds loans from financial institutions).
Shareholders funds: which mean equity share capital plus preference share capital plus reserves and surplus minus fictitious assets(e.g., preliminary expenses)
Computation: this ratio is computed by dividing the long term debts by the shareholders funds. This ratio is usually expressed as a pure ratio e.g, 2:1. in the form of a formula this ratio may be expressed as under:
Interpretation: it shows the margin of safety to long term creditors. A low debt equity ratio implies the use of more equity than debt which mean a larger safety margin for creditors since owner equity is treated as a margin of safety by creditors and vice versa.
The Braggs & Struttin'' Company manufactures an engine for carpet cleaners called the "Snooper." Budgeted cost and revenue data for the "Snooper" are given below, based on sales of
How to write introduction on strategy plan
Management Accounting 1) Which is concerned with provision of information to people within the organization to help them make better decisions? Management accounting is concer
Ask question Toll House makes chocolate chip cookies. The cookies pass through three production processes: mixing the cookie dough, baking, and packaging. Toll House uses process c
Question 1: (a) ‘The car industry is characterized by broad products differentiation' Analyse the long run situation of a car producer, commenting on profitability and efficien
Game Theory Game theory was developed for the purpose of analyzing competitive situation involving conflicting interests. In game theory, there are assumed to be two or more pe
Budgetary control According to CIMA the establishment of budgets relating the responsibilities of executive to the requirement of a policy and the continuous comparison of achi
Break even point or B.E.P. pricing method : Break even point is the volume of sales at which the total sale revenue of the product is equal to its total cost. In other words, it
different methods used to assign manufacturing overhead
Describe the Selling costs and Development costs Selling costs: These are costs of seeking to create and stimulate demand (sometimes termed as marketing) and securing orde
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd