English

What does proprietary ratio indicate? - Accounts

Advertisements
Advertisements

Question

What does proprietary ratio indicate?

Short Answer
Advertisements

Solution

The proprietary ratio indicates a company’s financial strength and stability by measuring how much of its total assets are financed by shareholders’ equity (or proprietors’ funds) rather than debt. A corporation with a higher proprietary ratio is more self-financed and has a larger equity base, making it less risky. It shows the company has enough equity to overcome losses.

shaalaa.com
  Is there an error in this question or solution?
Chapter 14: Ratio Analysis - SHORT ANSWER QUESTIONS [Page 14.109]

APPEARS IN

D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 14 Ratio Analysis
SHORT ANSWER QUESTIONS | Q 44. | Page 14.109
D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 15 Project Work
PROJECT WORK PROBLEMS | Q 24. | Page P-63
Share
Notifications

Englishहिंदीमराठी


      Forgot password?
Use app×