Assuming that the Debt-Equity Ratio is 1:2, state giving reason, whether the ratio will improve, decline or will have no change in case equity shares are issued for cash.
Assuming that the Debt-Equity Ratio is 1:2, state giving reason, whether the ratio will improve, decline or will have no change in case equity shares are issued for cash.
lets debt =100000 and equity =200000 equity issued of rs. =100000
now ratio will be =1:3 i.e decrease
obvously it will decrease due to increase in equity share capital which is at denominator and there will be no change in Debt...
CAclubindia
