The Balance Sheet, for the sake of convenience, can be redrafted as follows:
Balance Sheet
Debt Equity Ratio = Long-Term Debt / Equity
= Rs. 15,00,000/Rs. 1,10,00,000
= 0.136
Debt Ratio = Long-term Debt/Capital Employed
= Rs. 15,00,000/Rs. 1,25,00,000
= 0.12
Proprietary Ratio = Shareholders Funds/Capital Employed
= Rs. 1,10,00,000/Rs. 1,25,00,000 = 0.88
Alternatively, the debt ratio and proprietary ratio can be based on total assets (Rs. 1,39,00,000),
Then these shall work out as follows:
Debt Ratio = Total Debt/Total Assets
= Rs. 29,00,000/Rs. 1,39,00,000
= 0.209
Proprietary Ratio = Shareholders Funds/Total Assets
= Rs. 1,10,00,000/Rs. 1,39,00,000
= 0.791