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Question

Which of the following ratio is also termed as leverage ratio?

This question was previously asked in
SSC CGL 2017 (Tier 1) Previous Year Paper (16-Aug-2017) (Shift 1)
The correct answer is

Debt equity ratio

The correct answer is option 1. The debt equity ratio is also called the leverage ratio as it measures the financial leverage of a company, indicating the proportion of debt used in financing the company's assets relative to shareholders' equity.

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Similar Questions

  1. Which of the following formulae is INCORRECT?

  2. Interest Coverage Ratio and proprietary ratio comes under:

  3. Which ratios are calculated for measuring the efficiency of operation of business based on effective utilisation of resources?


Important Questions from Ratio analysis

  1. If preference share capital is $1,00,000$, cash balance is $20,000$, Debenture is $1,00,000$, creditors is $90,000$, equity share capital is $200000$. Fixed asset is $2,00,00$, then the gearing ratio is __________.
  2. Net profit after taxes of a firm is Rs.1,00,000 and its fixed interest charges on long term debt are Rs. 20,000. What is the interest coverage ratio if the rate of income tax is 60%?

  3. Match the items in Column – I with the items in Column – II and indicate the correct code :
     

    Column – IColumn – II
    a. Debt-Equity Ratioi. Net Profit before interest and tax
    $\div Interest  on  long  term  loans$
    b. Proprietary Ratioii. Equity share capital + Reserves
    $\div Preference  share  capital + Interest  bearing finance$
    c. Interest coverage ratioiii. Long term debts
    $\div Shareholder's  Funds $
    d. Capital gearing ratioiv. Shareholder's Funds
    $\div Total  Assets $


    Codes:

  4. A company sold 20% of the goods on cash basis and balance on credit basis. Debtors are allowed \(1\frac{1}{2}\) months’ credit and their balances as on 31st March, 2023 is Rs. 1,25,000. Assume that the sale is uniform throughout the year. Credit sales would be

  5. The amount of closing stock would be, when

    Sales - Rs. 6,00,000

    Opening Stock - Rs. 50,000

    Purchases - Rs. 5,00,000

    Productive Wages - Rs. 10,000

    Carriage Inwards - Rs. 7,000

    Rate of Gross Profit on cost - 20%

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