I. Equity and Liabilities

1. Shareholders funds

a) Share capital. 12,000.00

b) Reserves and surplus. 2000.00

c) Money received against share warrants. 1,000.00

2. Non-current Liabilities

a) Long-term borrowings. 4000.00

b) Other long-term liabilities. 400.00

c) Long-term provisions 600.00

3. Current Liabilities

a) Short-term borrowings. 2000.00

b) Trade payables. 1000.00

c) Other current liabilities. 500.00

d) Short-term provisions. 1500.00

Total. 25,000.00

II. Assets

1. Non-Current Assets

a) Fixed assets. 15,000.00

b) Non-current investments. 2000.00

c) Long-term loans and advances. 1000.00

2. Current Assets

a) Current investments. 1500.00

b) Inventories. 1500.00

c) Trade receivables. 1000.00

d) Cash and cash equivalents. 2,500.00

e) Short-term loans and advances. 500.00

Total. 26,000.00

Required:

a. Calculate the debt equity ratio

b. Interpret your result