{"id":43964,"date":"2024-04-15T21:36:57","date_gmt":"2024-04-15T21:36:57","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=43964"},"modified":"2024-04-15T21:36:57","modified_gmt":"2024-04-15T21:36:57","slug":"a-company-has-equity-capital-of-rs-200000-preference-capital-of-rs-100000-12-debentures-of-rs-100000-long-term-loans-of-rs-200000-and-short-term-loans-of-rs-100000-the-capital-gearin","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/a-company-has-equity-capital-of-rs-200000-preference-capital-of-rs-100000-12-debentures-of-rs-100000-long-term-loans-of-rs-200000-and-short-term-loans-of-rs-100000-the-capital-gearin\/","title":{"rendered":"A company has equity capital of Rs. 2,00,000 preference capital of Rs. 1,00,000, 12% debentures of Rs. 1,00,000, long-term loans of Rs. 2,00,000 and short-term loans of Rs. 1,00,000. The capital-gearing ratio will be:"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;01:01&#8243; option2=&#8221;0.5 : 1&#8243; option3=&#8221;0.4 : 1&#8243; option4=&#8221;None of the above&#8221; correct=&#8221;option2&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>B. 0.5 : 1<\/strong><\/p>\n<p>The capital-gearing ratio is a measure of a company&#8217;s financial leverage. It is calculated by dividing the company&#8217;s debt by its equity. In this case, the company has debt of Rs. 4,00,000 (Rs. 1,00,000 + Rs. 2,00,000 + Rs. 1,00,000) and equity of Rs. 3,00,000 (Rs. 2,00,000 + Rs. 1,00,000). Therefore, the capital-gearing ratio is 1.33 : 1.<\/p>\n<p>However, the question asks for the capital-gearing ratio in the form of 0 : 1. To convert the ratio to this form, we need to divide the numerator and denominator by 3. This gives us a capital-gearing ratio of 0.4 : 1.<\/p>\n<p>Option A is incorrect because it is the equity-gearing ratio. The equity-gearing ratio is calculated by dividing the company&#8217;s equity by its total assets. In this case, the company&#8217;s equity is Rs. 3,00,000 and its total assets are Rs. 5,00,000. Therefore, the equity-gearing ratio is 0.6 : 1.<\/p>\n<p>Option C is incorrect because it is the debt-equity ratio. The debt-equity ratio is calculated by dividing the company&#8217;s debt by its equity. In this case, the company&#8217;s debt is Rs. 4,00,000 and its equity is Rs. 3,00,000. Therefore, the debt-equity ratio is 1.33 : 1.<\/p>\n<p>Option D is incorrect because it is not a valid capital-gearing ratio.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;01:01&#8243; option2=&#8221;0.5 : 1&#8243; option3=&#8221;0.4 : 1&#8243; option4=&#8221;None of the above&#8221; correct=&#8221;option2&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-43964","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A company has equity capital of Rs. 2,00,000 preference capital of Rs. 1,00,000, 12% debentures of Rs. 1,00,000, long-term loans of Rs. 2,00,000 and short-term loans of Rs. 1,00,000. The capital-gearing ratio will be:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/a-company-has-equity-capital-of-rs-200000-preference-capital-of-rs-100000-12-debentures-of-rs-100000-long-term-loans-of-rs-200000-and-short-term-loans-of-rs-100000-the-capital-gearin\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A company has equity capital of Rs. 2,00,000 preference capital of Rs. 1,00,000, 12% debentures of Rs. 1,00,000, long-term loans of Rs. 2,00,000 and short-term loans of Rs. 1,00,000. The capital-gearing ratio will be:\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;01:01&#8243; option2=&#8221;0.5 : 1&#8243; option3=&#8221;0.4 : 1&#8243; option4=&#8221;None of the above&#8221; correct=&#8221;option2&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/a-company-has-equity-capital-of-rs-200000-preference-capital-of-rs-100000-12-debentures-of-rs-100000-long-term-loans-of-rs-200000-and-short-term-loans-of-rs-100000-the-capital-gearin\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T21:36:57+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"A company has equity capital of Rs. 2,00,000 preference capital of Rs. 1,00,000, 12% debentures of Rs. 1,00,000, long-term loans of Rs. 2,00,000 and short-term loans of Rs. 1,00,000. The capital-gearing ratio will be:","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/a-company-has-equity-capital-of-rs-200000-preference-capital-of-rs-100000-12-debentures-of-rs-100000-long-term-loans-of-rs-200000-and-short-term-loans-of-rs-100000-the-capital-gearin\/","og_locale":"en_US","og_type":"article","og_title":"A company has equity capital of Rs. 2,00,000 preference capital of Rs. 1,00,000, 12% debentures of Rs. 1,00,000, long-term loans of Rs. 2,00,000 and short-term loans of Rs. 1,00,000. The capital-gearing ratio will be:","og_description":"[amp_mcq option1=&#8221;01:01&#8243; option2=&#8221;0.5 : 1&#8243; option3=&#8221;0.4 : 1&#8243; option4=&#8221;None of the above&#8221; correct=&#8221;option2&#8243;]","og_url":"https:\/\/exam.pscnotes.com\/mcq\/a-company-has-equity-capital-of-rs-200000-preference-capital-of-rs-100000-12-debentures-of-rs-100000-long-term-loans-of-rs-200000-and-short-term-loans-of-rs-100000-the-capital-gearin\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T21:36:57+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/a-company-has-equity-capital-of-rs-200000-preference-capital-of-rs-100000-12-debentures-of-rs-100000-long-term-loans-of-rs-200000-and-short-term-loans-of-rs-100000-the-capital-gearin\/","url":"https:\/\/exam.pscnotes.com\/mcq\/a-company-has-equity-capital-of-rs-200000-preference-capital-of-rs-100000-12-debentures-of-rs-100000-long-term-loans-of-rs-200000-and-short-term-loans-of-rs-100000-the-capital-gearin\/","name":"A company has equity capital of Rs. 2,00,000 preference capital of Rs. 1,00,000, 12% debentures of Rs. 1,00,000, long-term loans of Rs. 2,00,000 and short-term loans of Rs. 1,00,000. 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