Question

Calculate proprietary ratio is total assest to be debt ratio is 2:1 debt is 5,00,000 equity shares capital is 0.5 times of debt. preferance share capital is 25%of equity share capital net profit before tax is 10,00,000 and rate of tax is 40%
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Answer 1

Answer:

Long-term debt = Total external liabilities - current liabilities

= Rs. 5,00,000 - Rs. 1,00,000

= Rs. 4,00,000

Total non-fictitious assets = Total assets - Fictitious assets

= Rs. 10,10,000 - Rs. 10,000

= Rs. 10,00,000

Shareholders funds = Non-fictitious total assets - Total liabilities

= Rs. 10,00,000 - Rs. 5,00,000

= Rs. 5,00,000

Net assets = Total non-fictitious assets - Current liabilities

= Rs. 10,00,000 - Rs. 1,00,000

= Rs. 9,00,000

Proprietary ratio = Shareholders funds/ Capital employed

= Rs. 5,00,000/Rs. 9,00,000

= 0.556

Explanation:

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