Explanation:

- Fixed Assets are the long-term tangible assets, valued here at Rs5,00,000.

- Current Assets are short-term assets, valued at Rs3,00,000.

- Equity Share Capital is Rs4,00,000, representing ownership of the company.

- Reserve refers to profits retained in the business, amounting to Rs2,00,000.

- Long-term Debts are Rs40,000, which must be repaid over a longer period.

Proprietary Ratio Formula:

$$ \text{Proprietary Ratio} = \frac{\text{Shareholders' Funds}}{\text{Total Assets}} $$

- Shareholders' Funds: Equity Share Capital + Reserve = Rs4,00,000 + Rs2,00,000 = Rs6,00,000

- Total Assets: Fixed Assets + Current Assets = Rs5,00,000 + Rs3,00,000 = Rs8,00,000

$$ \text{Proprietary Ratio} = \frac{6,00,000}{8,00,000} \times 100 = 75\% $$

The correct option is:

Option 1: 75%

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