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    Question

    Refer to the following information to answer the next 4 questions (Q1 to Q4)

    Calculate the Proprietary ratio of the company, from the

    above information.
    A 0.20 Correct Answer Incorrect Answer
    B 0.33 Correct Answer Incorrect Answer
    C 0.40 Correct Answer Incorrect Answer
    D 0.43 Correct Answer Incorrect Answer
    E 0.50 Correct Answer Incorrect Answer

    Solution

    Proprietary Ratio = Shareholders’ equity/ Total Assets   Shareholders’ funds = Equity share capital + Capital reserve + Profit& Loss a/c                                     = 40,000 + 8,000 + 12,000                                     = 60,000 Total assets = 1,20,000 Proprietary Ratio = 120,000/60,000                         = 0.50

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