GK
ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
The satisfactory ratio between internal and external equity is ____
|
|
1 : 1
|
|
|
1:2
|
|
|
2:1
|
|
|
3:1
|
Explanation:
Detailed explanation-1: -Debt to equity ratio is calculated to measure the long term soundness of the company. It expresses the relationship between external debts and internal equities.
Detailed explanation-2: -Satisfactory ratio between Long-term Debts and Shareholder’s Funds reveals how much amount of fixed assets are financed by long-term funds. Usually, total investment in fixed assets must be equal to total long-term funds, i.e. ratio should be 1: 1.
There is 1 question to complete.