When there is raw material commitment - and we make changes to ratios - we add amount to assets and debt. When we calculate debt / equity ratio after adjustment - shouldnt the amount increase both debt and equity alsoas equity is linked to assets?
assets - debt = equity say assets was 150$, debt was 50$ equity then was 100 now assets, debt (liabs) increase by 10 equity remains the same as can be seen => but D/E changes from 50/100 to 60/100 so Debt/Equity increases