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

higher

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lower

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average

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equalised

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Solution

The correct option is A higher
Proprietory ratio establishes the relationship between proprietor's fund and total assets. A higher proprietary ratio means that a company has more equity compared to debt.

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Similar questions

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.

A company with a debt-to-equity ratio of 2.5:1 and Rs 15,00,000 of shareholders' funds has debt of ________

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:

Q. ABC Company has shareholders' equity of ₹40,00,000 and total assets of ₹1,00,00,000. There is no goodwill on its balance sheet, nor any intangible assets. Its proprietary ratio is:

[2 marks]

From the following, calculate (a) Debt Equity Ratio (b) Total Assets to Debt Ratio (c) Proprietary Ratio.

	Rs
Equity Share Capital	75,000
Preference Share Capital	25,000
General Reserve	45,000
Accumulated Profits	30,000
Debentures	75,000
Sundry Creditors	40,000
Outstanding Expenses	10,000

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

The correct option is A higherProprietory ratio establishes the relationship between proprietor's fund and total assets. A higher proprietary ratio means that a company has more equity compared to debt.

The correct option is A higher
Proprietory ratio establishes the relationship between proprietor's fund and total assets. A higher proprietary ratio means that a company has more equity compared to debt.