From the financial statements given below for AB Ltd., calculate the following ratios and give your comments as a loan processing officer of the bank: Income statement of AB Ltd. for the year ending 31st March, 2019: in

From the financial statements given below for AB Ltd., calculate the following ratios and give your comments as a loan processing officer of the bank: Income statement of AB Ltd. for the year ending 31st March, 2019: in lakh in lakh Sales 500 Cost of Goods Sold : Stock, 1st April, 2018 40 Add : Purchase 245 Direct Expenses 25 310 Less : Stock, 31st March, 2019 60 250 Gross Profit 250 Operating Expenses 110 Interest Expenses 20 130 Net profit before tax 120 Provision for Income tax 60 Net Profit 60 Balance Sheet of AB Ltd. as at 31st March, 2019 Liabilities in Lakh Assets in Lakh Equity Share Capital 150 Fixed Assets 400 Reserves and Surplus 300 Stock 60 10% Debentures 200 Debtors 230 Creditors 180 Cash at Bank 155 Bills Payables 70 Bills Receivable 43 Prepaid Expenses 12 Total 900 Total 900 Calculate: Debt Equity Ratio