Q. 43 Solution of Accounting Ratios Chapter TS Grewal Book Class 12 2021-22

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Are you looking for the solution of Question number 43 of the Accounting Ratios of TS Grewal Book 2021-22 Edition for the 2021-22 session?

Question number 43 of the Accounting Ratios chapter is a practical one.

Solution of Question Number 43 of Accounting Ratios Chapter of TS Grewal Book 2021-22 Class 12

Question 43.

The debt to Equity Ratio of a company is 0.5:1. Which of the following suggestions would increase, decrease or not change it.

  1. Issue of Equity Shares
  2. Cash Received from Debtors
  3. Redemption of debentures
  4. Purchased goods on credit


1.Issue of Equity ShareIssue of equity shares would increase equity. due to increased denominator overall debt to equity ratio would decrease.
2.Cash Received from Debtorsa current asset is converted into another current asset. No change in debt to equity ratio as given transactions does not affect debt and equity.
3.Redemption of DebenturesRedemption of debentures reduces debt. due to decreased numerator. overall debt to equity ratio would decrease.
4.Purchased goods on creditcurrent assest and current liabilities are increased. no affect on debt and equity. No change on debt to equity ratio.
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