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(A) is the Correct Ans.
Debt / Equity
Debt Equity ratio = Debt/ Equity
Debt Equity ration is used to see the ration of total liabilities a firm is having compared to the equities of share holders in the firm. if the ration is less than one, it means most of the assets are financed by share holders, but if it is more than one, it means firm has financed the assets through external debts.
correct answer is A. Dept/ Equity.
Debt/Equity
answer (a)
in order to see if the establishment capable of trust we use this ratio to find how much the debtors have to the equity while the othe capital/ asset represent how much equity used in buying assets
Both the equation are correct. we can calculate debt equity ratio by both the ways. (which equation to follow that is depending on the organisation's own policy.) both the ratios are similar one is called as Debt equity and other one is Debt ratio.
answer no a (Debt / Equity
Is the perecentage of companies debt to finance its operations compared to its equity or shareholders funds
its means one debt paid against shareholder equity.it is equal to long term debt divided by shareholder equity.
