Question

Net Profit after interest and tax Rs.4,20,000, Current Assets Rs. 12,00,000; Current

Liabilities Rs.4,00,000; Tax Rate 30%; Fixed Assets Rs.22,00,000; 9% Long term debt

Rs.5,00,000.​

Answer 1

Answer:

0.556

Explanation:

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