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What will be impact of ‘purchase of a fixed asset on a credit of 3 months’ on a debt equity ratio of 1: 1?

  • Post category:Accountancy
  • Reading time:1 mins read

SOLUTION

There will be no effect on debt-equity ratio because the long-term loans as well as the Shareholder’s Funds remain unchanged.


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Previous PostWhat will be the impact of ‘issuing Rs. 5,00,000 equity shares to vendors of machinery’ on the Debt-Equity Ratio of 2: 1? (C.B.S.E. 2020. Mumbai, Chennai)
Next PostThe Debt- Equitv Ratio of A’ Ltd. is 1: 2. What is the effect of conversion of debentures into preference shares on this ratio?

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