Question

On the basis of following data, the Proprietary Ratio of a Company will be:

Equity Share Capital ₹ 3,00,000; Debentures ₹ 90,000; Current Liabilities ₹ 30,000; Statement of Profit & Loss Debit Balance ₹ 20,000.

Options

• 75%

• 80%

• 70%

• 82%

Answer 1

70%

Explanation:

Proprietary Ratio = `"Shareholder’s Funds"/"Total Assets"`

Shareholder’s Funds = Equity Share Capital − Dr. Bal. of Statement of P & L

= 3,00,000 − 20,000

= ₹ 2,80,000

Total Assets = Shareholder’s Funds + Debentures + Current Liabilities

= 2,80,000 + 90,000 + 30,000

= ₹ 4,00,000

Proprietary Ratio = `(2,80,000)/(4,00,000) xx 100`

= 70%