debt equity ratio is 26.9%
Debt equity ratio= equity multiplier- 1
calculating the value of equity multiplier,
return on equity= profit margin×total asset turnover× equity multiplier
0.1859 = 0.097×1.51×equity multiplier
equity multiplier=[tex]\frac{0.1859}{0.1464} = 1.269[/tex]
on substituting equity multiplier = 1.269 we get,
debt equity ratio= equity multiplier- 1
=1.269-1
= 0.269
Therefore debt equity ratio is 26.9%
What debt equity ratio means?
Definition: The debt-equity ratio is a measure of the relative contribution of the creditors and shareholders or owners in the capital employed in business. Simply stated, ratio of the total long term debt and equity capital in the business is called the debt-equity ratio
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