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Question :

On the basis of following information received from a firm, its proprietary ratio will be - 

Particulars

Amount

Fixed assets

330000

Current assets

190000

Preliminary Exp.

30000

Equity share capital    

244000

Prefrence share capital

170000

Reserve Fund

58000

Option 1: 80%

Option 2: 85%

Option 3: 70%

Option 4: 90%


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 16th Jan, 2024

Correct Answer: 85%


Solution : The shareholder's equity is divided by the total assets of the company to arrive at the proprietary ratio, which is expressed as a percentage.

Hence the ratio is - 

= (Equity share capital + Preference share capital + Reserve Fund - Preliminary Exp.)/(Fixed assets + Current assets)

= Rs.(244000 + 170000 + 58000 - 30000)/Rs.(330000+190000)

= Rs.442000/Rs.520000

= 85%

Hence the correct answer is option 2.

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