ABC Company is a sugar manufacturing and its position as on 31st December, 2010 is as follows:
ABC Company
Balance Sheet
As on 31st December, 2010
| Assets | Rs. | Liabilities and Owner's Equity | Rs. |
| Current Assets | 15,468 | Current Liabilities | 8,521 |
| Land & Building | 179,589 | Long term Debts | 96,895 |
| Plant & Machinery | 253,463 | Loan for plant & machinery | 253,463 |
|
|
| Equity | 89,641 |
| Total Assets | 448,520 | Total Liabilities | 448,520 |
This Balance Sheet also shows that ABC Company took loan from financial institution to purchase plant & machinery for Rs. 253,463.
Keeping the given information into consideration, you are required to answer the following:
1. What would be Debt Ratio before taking loan?
2. What would be Debt Ratio after taking loan?
3. Please comment that how the change in Debt Ratio would affect the decision of the financial institution if the company requests for further loan?
wo kya poch ra hai or tum kya bta ray hoo
Debt ratio mangi hai or decision ki waja bi plz check and solve Thanks
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