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3.34 Analysis of Financial Statements—CBSE XII
Illustration 31.
Compute Total Assets to Debt Ratio from the following information:

` `
Total Assets 7,50,000 Bills Payable 30,000
Total Debts 8,00,000 Bank Overdraft 37,500
Creditors 75,000 Outstanding Expenses 17,500
Solution:
Total Assets ` 7,50,000
Total Assets to Debt Ratio = = = 1.17 : 1.
Debt ` 6,40,000
Debt = Total Debts – Creditors – Bills Payable – Bank Overdraft – Outstanding Expenses
= ` 8,00,000 – ` 75,000 – ` 30,000 – ` 37,500 – ` 17,500 = ` 6,40,000.
Note: Creditors, Bills Payable, Bank Overdraft and Outstanding Expenses are Current Liabilities. Hence,
these are deducted.
Illustration 32.
From the following information, calculate Total Assets to Debt Ratio:

` `
Total Debt 4,50,000 Short-term Bank Loan 50,000
Sundry Creditors 75,000 Total Assets 5,50,000
Expenses Payable 25,000 Surplus, i.e., Balance in Statement of
Bills Payable 25,000 Profit & Loss (Debit) 20,000

Solution:
Total Assets ` 5,50,000
Total Assets to Debt Ratio = = = 2 : 1.
Debt ` 2,75,000
Note: Debt = Total Debt – Short-term Bank Loan – Trade Payables (Sundry Creditors + Bills Payable)
– Other Current Liabilities (Expenses Payable).
= ` 4,50,000 – ` 50,000 – (` 75,000 + ` 25,000) – ` 25,000 = ` 2,75,000.
Illustration 33.

From the following Balance Sheet of Y Ltd. for the year ended 31st March, 2024, calculate
Total Assets to Debt Ratio:

Particulars `
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
Share Capital 20,00,000
2. Non-Current Liabilities
Long-term Borrowings 10,00,000
3. Current Liabilities
Trade Payables 5,00,000
Total 35,00,000