Practice Total Assets to Debt Ratio - 1.4.2.2 | ICSE Class 12 Accounts – Chapter 5: Ratio Analysis | ICSE Class 12 Accounts
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1.4.2.2 - Total Assets to Debt Ratio

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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What does the Total Assets to Debt Ratio measure?

💡 Hint: Think about the relationship between assets and liabilities.

Question 2

Easy

How would you calculate the Total Assets to Debt Ratio?

💡 Hint: Remember the formula: Total Assets ÷ Long-Term Debt.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does a Total Assets to Debt Ratio of less than 1 imply?

  • The company has more assets than liabilities
  • The company has more liabilities than assets
  • The company is financially stable

💡 Hint: Remember what the ratio represents about the balance of assets and liabilities.

Question 2

True or False: A higher Total Assets to Debt Ratio means a company is at higher financial risk.

  • True
  • False

💡 Hint: Consider the meaning of having more assets in relation to debt.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company has total assets worth ₹800,000 and long-term debt of ₹300,000. Discuss what this ratio indicates for long-term investors.

💡 Hint: Consider how the ratio reflects the company's capability to manage its debts.

Question 2

If another company has a Total Assets to Debt Ratio of 0.8 and is facing declining revenues, what might investors consider regarding future investment?

💡 Hint: Think about how ratios interact with a company's performance over time.

Challenge and get performance evaluation