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Question
What is proprietary ratio?
Short Answer
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Solution
The proprietary ratio is a financial ratio that determines how much of a company’s total assets are financed by shareholders’ equity (or owners’ capital). It measures a company’s financial strength and stability by indicating how much of its assets are funded by its owners rather than debt.
The formula for the proprietary ratio is:
Proprietary Ratio = `"Equity (Shareholders’ Funds)"/"Total Assets"`
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