On the basis of following data the proprietary ratio of a Company will be Equity Share Capital Rs6 0...........

On the basis of following data, the proprietary ratio of a Company will be :

Equity Share Capital Rs6,00,000; Debentures Rs2,40,000; Statement of Profit & Loss Debit Balance Rs40,000.

74%

65%

82%

70%

- The proprietary ratio indicates the proportion of shareholders' funds to total assets. It shows how much of the company is funded by owners.

- To calculate proprietary ratio = Shareholders' Equity / Total Assets.

- Shareholders' Equity = Equity Share Capital - Statement of Profit & Loss Debit Balance = Rs 6,00,000 - Rs 40,000 = Rs 5,60,000.

- Total Assets = Shareholders' Equity + Debentures = Rs 5,60,000 + Rs 2,40,000 = Rs 8,00,000.

- Proprietary Ratio = Rs 5,60,000 / Rs 8,00,000 = 70%.

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