Calculate the market to book ratio ,debt equity ratio and retained income for the year.
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Calculate the market to book ratio ,debt equity ratio and retained income for the year.
whats wrong with my answers kindly
Answer
1.
Market to book ratio = Market capitalisation/ Net book value = 243,000,000/1,750,000 = 138.85
Market capitalisation = MPS x No. of shares = 270 x 900,000 = 243,000,000
As the original cost of assets and
2.
Debt/equity ratio = (Short term debt+Long term debt)/Shareholder's fund = (730,000+180,000)/(1,800,000+160,000)
Debt-equity ratio = 910,000/1,960,000 = 0.464
Short term debt is payables in the ques, long term debt is the loan amount in the ques, and
shareholders' fund = Share capital +
Debt equity is less than 1 which means that it is a low levered company i.e. it has a low level of debt in comparison to equity.
3.
Retained earning is given = 160,000
Step by step
Solved in 4 steps
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