Match the following : Part - I Part - II List-IList-II (a) Total Debt Ratio (i) Total Debt / Capital…
Standard solvency and leverage ratio definitions match as follows: Total Debt Ratio (a) = Total Debt / Capital Employed (i); Debt-Equity Ratio (b) = Total Debt / Net Worth…
Choose your answer
Match the following : Part - I Part - II
| List-I | List-II |
|---|---|
| (a) Total Debt Ratio | (i) Total Debt / Capital Employed |
| (b) Debt - Equity Ratio | (ii) Total Debt / Net Worth |
| (c) Total Capital - Equity Ratio | (iii) Capital Employed / Net Worth |
| (d) Interest Coverage Ratio | (iv) EBIT / Interest |
Answer and explanation
Correct answer A
Standard solvency and leverage ratio definitions match as follows: Total Debt Ratio (a) = Total Debt / Capital Employed (i); Debt-Equity Ratio (b) = Total Debt / Net Worth (ii); Total Capital-Equity (Proprietary reciprocal) Ratio (c) = Capital Employed / Net Worth (iii); and Interest Coverage Ratio (d) = EBIT / Interest (iv), giving -(i), (b)-(ii), (c)-(iii), (d)-(iv).
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UGC NET Commerce