What would be the impact on the debt to assets ratio

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Question - Amber Ltd has the following statement of financial position:

Statement of financial position before set-off

Loans Payable

3,000,000

Loans receivable

3,600,000

Shareholder's equity

3,000,000

Non-current assets

2,400,000

 

6,000,000

 

6,000,000

Assume that Amber Ltd has an amount owing to Robyn Ltd of $900,000 and an amount receivable from Robyn Ltd of $1,200,000. Assuming a right of set-off exists, why would Amber Ltd. want to perform a set-off? What would be the impact on the debt to assets ratio?

Reference no: EM132087438

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