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Question
From the following information, calculate Proprietary Ratio:
| Share Capital | ₹ 300000 |
| Reserve and Surplus | ₹ 180000 |
| Non-current Assets | ₹ 1320000 |
| Current Assets | ₹ 600000 |
Sum
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Solution
Proprietary Ratio = `"Shareholders' Fund"/"Total Assets"`
Proprietary Ratio
= `("Share Capital + Reserve and Surplus")/("Non-current Assets + Current Assets")`
Proprietary Ratio = `(300000 + 180000)/(1320000 + 600000) = 0.25 : 1` or 25 %
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