Proprietary Ratio

Q.

_______ expresses relationship of proprietor’s (shareholders) funds to total assets.

1. Proprietary ratio

2. None of these

3. Debt equity ratio

4. Inventory turnover ratio

Q.

If some goodwill already exists in the books and the new partner brings in his share of goodwill in cash, how will you deal with existing amount of goodwill ?

Q.

Find the simple interest on Rs. 12000 at 12% p.a. for 2 years.

Q.

Proprietary ratio is expressed in terms of ___

1. Times

2. Percentage

3. Days

4. None of these

Q. Information given is as follows:
Fixed Long term Loans Rs $3,50,000$
Fixed Assets Rs $12,00,000$
Share capital Rs $8,00,000$
Current Liabilities Rs $2,50,000$
Current Assets Rs $4,00,000$
Solvency Ratio is .

1. $0.5:1$
2. $5:12$
3. $5:16$
4. $16:17$

Q.

Proprietary Ratio = _________________

1. $\frac{\text{Reserves \& Surplus}}{\text{Capital employed}}$ (or net assets)

2. $\frac{\text{Shareholders' Funds}}{\text{Total Assets}}$

3. None of these

4. Both :

   $\frac{\text{Reserves \& Surplus}}{\text{Capital employed}}$ (or net assets)

   $\frac{\text{Shareholders' Funds}}{\text{Total Assets}}$

Q. A/an proprietary ratio means that a company has more equity compared to debt.

1. higher
2. lower
3. average
4. equalised

Q.

ABC Company has shareholders' equity of Rs 20, 00, 000 and total assets of Rs 50, 00, 000. There is no goodwill on its balance sheet, nor any intangible assets. Its proprietary ratio is:

1. 40%

2. 60%

3. 50%

4. None of these

Q. Shareholders Funds / Total Assets = .

1. Liquidity ratio
2. Solvency ratio
3. Profitability ratio
4. None of these

Q.

If the proprietary ratio is high, this indicates that a company has a sufficient amount of equity to support the functions of the business. State true or false.

1. True

2. False

Q. = Shareholders' Fund / Total Assets

1. Current Ratio
2. Liquid Ratio
3. Proprietary Ratio
4. Asset Ratio

Q.

If a business is making use of too much debt, the value of proprietary ratio would be ____

1. Higher

2. Lower

3. Equal to 1

4. All of these

Q. G Ltd. acquired assets worth Rs. $7,50,000$ from H Ltd. by issue of shares of Rs. $100$ at a premium of $25\%$. The number of shares to be issued by G Ltd. to settle the purchased consideration will be _____________.

1. $9,375$ shares
2. $6,000$ shares
3. $7,500$ shares
4. $5,625$ shares

Q. Proprietary ratio express relationship of proprietor's funds to net __________.

1. Current assets
2. Assets
3. Current liabilities
4. Liabilities

Q. Shares in Neha Ltd. was acquired by Mr.Paras at a cost of Rs. $50,000$. During the current p.y. he got right to acquire fresh shares on the date of receiving the right entitlement intimation fair market value of existing shares held by Mr. Paras was Rs.$60,000$. Mr. Paras sold the right paper for Rs.$75,000$. His capital gains liability would be:

1. Rs. $10,000$
2. Rs. $75,000$
3. Rs. $15,000$
4. Rs. $25,000$

Q. If a business is making use of too much debt, the value of proprietary ratio would be .

1. high
2. low
3. around 0.5
4. around 1