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Accounting Ratios 3.43
10. From the following Balance Sheet of Z Ltd., Calculate:
(i) Debt to Equity Ratio (ii) Total Assets to Debt Ratio
(iii) Proprietary Ratio (iv) Interest Coverage Ratio.
Particulars `
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital:
(i) Equity Share Capital 8,00,000
(ii) 10% Preference Share Capital 2,08,000

(b) Reserves and Surplus:
(i) General Reserve 84,000
(ii) Surplus, i.e., Balance in Statement of Profit & Loss 84,000 1,68,000
2. Non-Current Liabilities
12% Mortgage Loan 3,60,000
3. Current Liabilities
(a) Short-term Loan 30,000
(b) Trade Payables 1,71,600
Total 17,37,600
II. ASSETS
1. Non-Current Assets
Property, Plant and Equipment and Intangible Assets:
—Property, Plant and Equipment:
(i) Land and Building 4,80,000
(ii) Furniture 3,60,000
(iii) Machinery 2,52,000 10,92,000
2. Current Assets
(a) Inventory (Stock) 3,00,000
(b) Trade Receivables:
(i) Debtors 1,05,600
(ii) Bills Receivables 2,40,000 6,45,600
Total 17,37,600

Additional Information:
Net Profit after Interest and Tax = ` 3,00,000. Rate of Income Tax = 40%.
[Ans.: (i) Debt to Equity Ratio = 0.31 : 1; (ii) Total Assets to Debt Ratio = 4.83 : 1;
(iii) Proprietary Ratio = 0.68 : 1; (iv) Interest Coverage Ratio = 12.57 Times.]
11. Following is the Statement of Profit & Loss of Sham Ltd. for the year ended 31st March, 2024 and the
Balance Sheet of the company as at that date:
STATEMENT OF PROFIT & LOSS
for the year ended 31st March, 2024
Particulars `
Revenue from Operations (Net Sales) 2,00,000
Expenses:
Purchases of Stock-in-Trade 1,00,000
Changes in Inventories (Opening Stock – Closing Stock) (` 25,000 – ` 30,000) (5,000)
Employees Benefit Expenses (Salaries) 17,000
Other Expenses: Direct Expenses 8,000
Loss on Sale of Furniture 10,000 18,000 1,30,000
Net Profit 70,000