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Business Data Management · Quiz 2 · 16 Aug 2026 · May 2026 term

Question 21: Calculate the Debt-Equity Ratio and the Interest Earned …

Question 21

+2 marksOne correct option

Directions: Read the following simplified financial data for X Robotics Ltd. carefully and answer the given subquestions. Show your mathematical reasoning. All formulas and concepts required are based strictly on the provided financial analysis case study framework.
Company Overview & Financial Data (Figures in Millions of Rupees):
X Robotics Ltd. is an industrial automation manufacturer. Below is a snapshot of their simplified financial position for the fiscal year ending March 31, 2025 (FY 2025), along with select figures from FY 2024.
Simplified Profit & Loss Statement Data (FY 2025):
● Revenue from Operations: ₹500 ● Cost of Materials and Services: ₹300 ● Employee Benefits & Other Expenses: ₹100 ● Depreciation: ₹20 ● Finance Costs (Interest): ₹10 ● Tax Rate: 30% flat on Profit Before Tax (PBT) ● (Note: For FY 2024, Revenue from Operations was ₹400).
Simplified Balance Sheet Data (As of March 31, 2025):
● Total Assets: ₹400 ● Shareholder's Equity (Net Worth): ₹200 ● Total Debt (Borrowings): ₹100 (Note: The company pays a flat 10% interest rate on its debt) ● Average Inventory: ₹60 ● Average Debtors (Trade Receivables): ₹50
Market Data:
● Shares Outstanding: 10 million shares ● Market Price per Share: ₹73.50 ● Total Dividends Paid: ₹24.5 million

Calculate the Debt-Equity Ratio and the Interest Earned Ratio for FY 2025.

  1. A

    Debt-Equity Ratio: 2.00x, Interest Earned Ratio: 7.00 times

  2. B

    Debt-Equity Ratio: 0.50x, Interest Earned Ratio: 10.00 times

  3. C

    Debt-Equity Ratio: 0.25x, Interest Earned Ratio: 10.00 times

  4. D

    Debt-Equity Ratio: 0.50x, Interest Earned Ratio: 4.90 times

Show answer

Correct answer

  • B

    Debt-Equity Ratio: 0.50x, Interest Earned Ratio: 10.00 times

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Question 21 of 24 in the IIT Madras BS Business Data Management (BDM) Quiz 2 paper sat on 16 Aug 2026, in the May 2026 term (Business Data Management 14 Aug 26). It carries 2 marks.

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