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Capital structure

Why ko is taken as percentage what is relevance of expressing everything in terms of percentage


Aishwarya Sreepada

Aishwarya Sreepada

CA Inter

1K+

15-May-20 19:32

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Aishwarya Sreepada

Aishwarya Sreepada

CA Inter

1K+

15-May-20 22:25

Ko is expressed in percentage so as to compare the cost of getting the capital with that of the capital received. For example, we take the capital to be Rs.1,00,000 and the cost of getting that capital is 10%. So we get to know that the cost of getting the capital is Rs.1,00,000 x 10% = Rs.10,000. Hence, we provide everything in percentages so as to compare the percentage of cost we incurred on capital with that of another company in the same period or within the company for different periods.


Madhuri Veluri

Madhuri Veluri

CA Inter

2K+

18-May-20 19:28

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