Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

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.

Options:

100%

25%

70%

40%

Correct Answer:

25%

Explanation:

Proprietary Ratio = \(\frac{\text{shareholder's funds}}{\text{capital employed}}\) x 100
                            = [
(500000 + 300000)/ (2200000 + 1000000)] X 100
                            = (800000/ 3200000) X 100
                            = (1/4) X 100
                            = 25%