Join Sarthaks eConnect Today - Largest Online Education Community!
0 votes
6 views
asked in Accounts by (43.9k points)

The following capital structure his been extracted from the Balance Sheet of Ahuja Ltd.

ParticularsRs.
Equity Share Capital30,00,000
Reserves10,00,000
10% Debentures40,00,000
12% Preference Shares Capital20,00,000
Capital employed1,00,00,000

Calculate gearing ratio if the company earns a profit of Rs. 20,00,000 before interest and tax and tax rate of 50%.

1 Answer

0 votes
answered by (46.8k points)
selected by
 
Best answer

The capital gearing ratio can be calculated as follows:

= (Funds bearing fixed interest/dividend) / Total capital employed

= (60,00,000 / 1,00,00,000)

= 0.6 or 60%

Related questions

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.

One Thought Forever

“There is a close connection between getting up in the world and getting up in the morning.“
– Anon
~~~*****~~~

Categories

...