Calculate Proprietary Ratio from the following data.
i. Non Current Assets = ₹4,00,000
ii. Current Assets = ₹2,00,000
iii. Current Liabilities = ₹3,00,000
There are no non current liabilities of the company.
Answer & explanation
Correct answer: option 2
The correct answer is option 2- 0.5 : 1.
Total assets = Current assets + Non current assets
= 2,00,000 + 4,00,000
= ₹6,00,000
Total assets = Non current liabilities + Current liabilities + Shareholders funds
6,00,000 = 0 + 3,00,000 + Shareholders funds
Shareholder's Funds = 6,00,000 - 3,00,000
= 3,00,000
Proprietary Ratio = Shareholder's Fund / Total Assets
= 3,00,000 / 6,00,000
= 0.5 : 1