The debt-to-equity ratio (D/E) is a financial ratio.
It indicates the relative proportion of shareholders' equity and debt used to finance the assets of a business organisation.
In short, the debt-equity ratio is the ratio of the total long term debt to the equity capital in the business.
A certificate from a Chartered Accountant in whole time practice may be required in certain cases requiring the certification on the debt-equity ratio of an entity.
Hereunder is a template of certificate from CA certifying the debt - equity ratio of a company.
SAMPLE
Certificate
TO WHOMSOEVER IT MAY CONCERN
This is to certify that the Debt - Equity ratio of .......................... Limited ("the Company), bearing CIN: ........................... and having its registered office situated at (Address), as on (Date) is ..........
The detailed calculation of the debt - equity ratio on the basis of the provisional/audited financial statements as on (Date) is provided hereunder:
S.No. | Particulars | Amount (Rs.)
1. Equity Share Capital ..................
2. Preference Share Capital ..................
3. Reserves and Surplus ..................
4. Total Equity (1+2+3) .....................
5. Non-Convertible Debentures ..................
6. Secured Loans from Banks ..................
7. Secured Loans from Others ..................
8. Total Debts (5+6+7) .....................
9. Debt-Equity Ratio (8/4) .....................
We certify the above statement and facts on the basis of the provisional/audited financial statements as on (Date) and other relevant records and documents produced before us, and as per the information and explanation given to us to our satisfaction and the same is true and correct to the best of our knowledge and belief.
For M/s. ............ & Associates
Chartered Accountants
FRN: ...............
(signature)
(Name of the CA)
Partner
Memb. No. ..............
Date: ...................
Place: ..................
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