Question : Fixed assets Rs.500000; Current assets Rs.300000; Equity share capital Rs. 400000; Reserves Rs.200000; Long term debt Rs.40000. Proprietory ratio will be -
Option 1: 75%
Option 2: 80%
Option 3: 133%
Option 4: 85%
Correct Answer: 75%
Solution : The shareholders equity is divided by the total assets of the company to arrive at the proprietary ratio, which is expressed as a percentage.
Total shareholder euity is - Equity share capital + Reserves
= 400000 + 200000 = 600000
Total assets of the company = Fixed assets + Current assets
= 500000 + 300000
= 800000
Hence the Proprietory ratio is - 600000*100 / 800000
= 75%
Hence the correct answer is option 1.
Question : Which of the following statements is false?
Question : Fixed Assets (Gross) RS. 10,00,000; Accumulated Depreciation RS. 5,00,000; Non-Current Investments RS. 50,000; Long-term Loans and Advances RS. 2,00,000; Current Assets RS. 2,50,000; Current Liabilities RS. 10,00,000; Long-term Borrowings RS. 3,25,000; Long-term Provisions RS.
Question : ________ratio is a variation of the debt-equity ratio and gives the same indication as the debt-equity ratio. In this ratio, total assets are expressed in relation to long-term debts.
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