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Calculate proprietary ratio on the basis …

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Calculate proprietary ratio on the basis of following particulars : Non Current Assets 5,00,000 Current Assets 3,00,000 Equity Share Capital 0.4 times of total assets Preference Share Capital 0.25 times of equity share capital General Reserve 1,50,000 Net Profit before tax 1,20,000 Tax Rate 25%

Posted by Keshav Khandelwal 1 year, 3 months ago

CBSE > Class 12 > Accountancy

1 answers

Harsh Singh 1 year, 3 months ago

To calculate the proprietary ratio, we need to find the shareholders' funds and total assets. Equity Share Capital = 0.4 * Total Assets Preference Share Capital = 0.25 * Equity Share Capital Shareholders' Funds = Equity Share Capital + Preference Share Capital + General Reserve Total Assets = Non-Current Assets + Current Assets Now, let's calculate: Equity Share Capital = 0.4 * Total Assets = 0.4 * (Non-Current Assets + Current Assets) = 0.4 * (5,00,000 + 3,00,000) = 0.4 * 8,00,000 = 3,20,000 Preference Share Capital = 0.25 * Equity Share Capital = 0.25 * 3,20,000 = 80,000 Shareholders' Funds = Equity Share Capital + Preference Share Capital + General Reserve = 3,20,000 + 80,000 + 1,50,000 = 5,50,000 Total Assets = Non-Current Assets + Current Assets = 5,00,000 + 3,00,000 = 8,00,000 Proprietary Ratio = (Shareholders' Funds / Total Assets) * 100 = (5,50,000 / 8,00,000) * 100 = 68.75% The proprietary ratio is approximately 68.75%.

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