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Question
Proprietary ratio is ______.
Options
Long term Debts/Shareholder’s Funds
Total Assets/Shareholder’s Funds
Shareholder’s Funds/Total Assets
Shareholder’s Funds/Non-Current Assets
MCQ
Fill in the Blanks
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Solution
Proprietary ratio is shareholder’s funds/total assets.
Explanation:
Proprietary Ratio is calculated as the ratio of Shareholders’ Funds to Total Assets. It shows the proportion of total assets financed by the proprietors’ funds, indicating the financial strength and long-term solvency of the business.
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