Proprietary ratio indicates the relationship between proprietors funds and ..... .

ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Proprietary ratio indicates the relationship between proprietor’s funds and ____ .

A	Reserve
B	Debentures
C	Share capital
D	Total assets

Explanation:

Detailed explanation-1: -The proprietary ratio is expressed in the form of a percentage and is calculated by dividing the shareholders equity with the total assets of the business.

Detailed explanation-2: -Proprietary Ratio Definition It also assesses the strength of the capital structure. This ratio is the inverse of the debt to asset ratio. The proprietary ratio establishes a relation between the ‘proprietors’ fund and the total assets of the company.

Detailed explanation-3: -This ratio indicates the proportion of total assets financed by owners. It is calculated by dividing proprietor (Shareholder) funds by total assets. This ratio establishes the relationship between fixed assets and shareholder funds. It is calculated by dividing fixed assets by shareholder funds.

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GENERAL KNOWLEDGE

GK

ACCOUNTING