Calculate the Proprietary Ratio from the following information:
Share Capital = ₹5,00,000
Non-Current Assets = ₹22,00,000
Reserves and Surplus = ₹3,00,000
Current Assets = ₹10,00,000
Answer & explanation
Correct answer: option 2
The correct answer is option 2- 25%.
Shareholders funds = Share Capital + Reserves and Surplus
= ₹5,00,000 + ₹3,00,000
= ₹8,00,000
Capital employed/Net assets = Non-Current Assets + Current Assets
= 22,00,000 + 10,00,000
= 32,00,000
Proprietary Ratio = Shareholder's funds/Capital employed x 100
= (8,00,000/ 32,00,000) X 100
= (1/4) X 100
= 25%