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:

60%

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40%

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50%

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None of these

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Solution

The correct option is B
40%

$P r o p r i e t a r y r a t i o = \frac{S h a r e h o l d e r s^{'} F u n d s}{T o t a l A s s e t s} \times 100 = \frac{R s 20, 00, 000}{R s 50, 00, 000} \times 100 = 40 %$

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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 Balance Sheets of X Ltd. as at 31st March, 2016 and 2015, prepare a common size Balance Sheet.
$\begin{matrix} Particulars & Note & Amount (Rs) & Amount (Rs) No. & 31 - 3 - 2016 & 31 - 3 - 2015 1. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital & 80, 00, 000 & 60, 00, 000 (b) Reserves and Surplus & 12, 00, 000 & 8, 00, 000 (2) Non-current liabilities Long term borrowings & 24, 00, 000 & 20, 00, 000 (3) Current liability : Trade Payables & 4, 00, 000 & 12, 00, 000 Total & 1, 20, 00, 000 & 1, 00, 00, 000 II. Assets (1) Non-current Assets Fixed Assets (a) Tangible & 80, 00, 000 & 60, 00, 000 (b) Intangible & 4, 00, 000 & 12, 00, 000 (2) Current Assets (a) Inventories & 24, 00, 000 & 20, 00, 000 (b) Cash and cash equivalents & 12, 00, 000 & 8, 00, 000 Total & 1, 20, 00, 000 & 1, 00, 00, 000 \end{matrix}$

ABC Co. has current assets of Rs. 50,000 and total assets of Rs. 1,50,000. ABC has current liabilities of Rs. 30,000 and total liabilities of Rs. 80,000. What is the amount of ABC's Shareholders' Fund?

Q. Calculate proprietary ratio, from the following information:
Total external liabilities = Rs. 5,00,000
Balance sheet total = Rs. 10,10,000
Current liabilities = Rs. 1,00,000
Fictitious assets = Rs. 10,000

Q. Calculate debt equity ratio, from the following information:
Total external liabilities = Rs. 5,00,000
Balance sheet total = Rs. 10,10,000
Current liabilities = Rs. 1,00,000
Fictitious assets = Rs. 10,000

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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:

The correct option is B 40% Proprietary ratio=Shareholders′ FundsTotal Assets×100=Rs 20,00,000Rs 50,00,000×100=40%

The correct option is B
40%

$P r o p r i e t a r y r a t i o = \frac{S h a r e h o l d e r s^{'} F u n d s}{T o t a l A s s e t s} \times 100 = \frac{R s 20, 00, 000}{R s 50, 00, 000} \times 100 = 40 %$