firat

Actually, on second thought, it doesn't clear the matter up. The balance sheet shown is post-transaction, so cash is already $500mm lower, and the asset of the bought company is $500mm higher. So the net assets haven't changed.

To back this all out and look at it as a proportionate consolidation, there is no "parent", or even in a regular acquisition consolidation, the cash would move from parent to acquired company. In either case, there is no need to back out the cash (or asset) again in order to come up with the debt/equity ratio.