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What is the formula of Debt Equity Ratio? Also define its
importance in a firm.

Answers were Sorted based on User's Feedback



What is the formula of Debt Equity Ratio? Also define its importance in a firm...

Answer / navesh joshi

Debt Equity Ratio = Debt/Equity
Debt= Long term borrowed funds
equity= share capital+ preference share capital +
reserves&surplus - fictitious asset

the importance of this ratio is to judge the long solvency
position of a company and capital structure.

Is This Answer Correct ?    23 Yes 0 No

What is the formula of Debt Equity Ratio? Also define its importance in a firm...

Answer / rahul sharma

Debt Equity Ratio = Debt/Equity
Debt= Long term borrowed funds

Equity= share capital+ preference share capital +
reserves&surplus - fictitious asset- P&L a/c dr balance.

Is This Answer Correct ?    4 Yes 2 No

What is the formula of Debt Equity Ratio? Also define its importance in a firm...

Answer / harish

Total Debt/Total Equity

It indicates the financial advantage of the concern(popularly
called leverage).

Is This Answer Correct ?    2 Yes 0 No

What is the formula of Debt Equity Ratio? Also define its importance in a firm...

Answer / libina kutty

DEBT EQUITY RATIO = DEBT / EQUITY

IT TELLS D TOTAL DEBT OF AN ENTITY TO ITS EQUITY . IT SHOULD
BE IN THE RATIO OF 2:1. WHICH MEANS FR EVRY 2 DEBT 1 EQUITY
SHOULD BE THEIR.

Is This Answer Correct ?    1 Yes 0 No

What is the formula of Debt Equity Ratio? Also define its importance in a firm...

Answer / saurabh

debt/equity ratio:

debt :(long term debt + short term debt)

equity : (common share + pref share+ reserves and surplus)

it is used to assess the
1)riskiness
2)used by banks to check the existing composition of debt -
should be on the lower side to leave scope for more debt

Is This Answer Correct ?    1 Yes 1 No

What is the formula of Debt Equity Ratio? Also define its importance in a firm...

Answer / suresh

Debt Equity Radio : Debt/Equity

Debt: Long term Loans, Overdraft , Borrowings

Equity : share Capital and preference share Capital +
Reserve and Surplus - if Any loss

Is This Answer Correct ?    0 Yes 3 No

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