12th Class Accountancy Accounting Ratios Question Bank MCQs - Accounting Ratios

  • question_answer
    Consider the following information: Long-term borrowings Rs. 2,00,000 Long-term provision Rs. 1,00,000 Current liabilities Rs. 50,000 Non-current assets Rs. 3,60,000 Current assets Rs. 90,000 Proprietary ratio will be:

    A) 22.2%               

    B) 21.8%

    C) 36%                  

    D) None of these

    Correct Answer: A

    Solution :

    [a] 22.2%
    Hint: Proprietary Ratio =\[\frac{Shareholders' Fund}{Total Assets}\]
    Shareholder's fund = Total Assets - Long-term borrowings - Long-term Provision - Current Liabilities
                               = 4,50,000 - 50,000 - 1,00,000 - 2,00,000 = Rs. 1,00,000
    Total Assets = Non-current Assets + Current Assets
                      = 3,60,000 + 90,000 = Rs. 4,50,000
    Proprietary Ratio = \[\frac{1,00,000}{4,50,000}\times 100\]= 22.2%


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