On the basis of following information received from a firm its Proprietary Ratio will be Fixed Asset...........

On the basis of following information received from a firm, its Proprietary Ratio will be :

Fixed Assets Rs3,30,000; Current Assets Rs1,90,000; Preliminary Expenses Rs30,000; Equity Share Capital Rs2,44,000; Preference Share Capital Rs1,70,000; Reserve Fund Rs58,000.

70%

80%

85%

90%

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Explanation:

- Proprietary Ratio is used to measure the proportion of shareholders' equity to total assets. It's calculated as: Shareholders' Funds / Capital employed.

- Shareholders' Funds include Equity Share Capital, Preference Share Capital, and Reserve Fund. In this case, it's Rs244,000 + Rs170,000 + Rs58,000 = Rs472,000.

Fictcious asset are taken in calculation of capital employed

- Total Assets include Fixed Assets, Current Assets, and Preliminary Expenses. Here, it's Rs330,000 + Rs190,000 = Rs5,20,000.

- Proprietary Ratio Calculation: Rs472,000 / Rs5,20,000 = 90.7 % or closest 90%