Loading the lesson
Loading the lesson
Search AllRounder.ai
Search the courses, subjects, tracks, games and features, or jump straight to a page.
Search the courses, subjects, tracks, games and features, or jump straight to a page.
2 cards from this section. Quick, good the night before a test.
What is the formula for the Proprietary Ratio?
Think about what the ratio is measuring.
How does a higher Proprietary Ratio affect financial risk?
Consider what higher equity funding implies.
What does a higher Proprietary Ratio indicate?
Think about the implications of financing through shareholders' equity.
True or False: A Proprietary Ratio of 1 means all assets are financed by equity.
Consider the meaning of a total reliance on equity financing.
You have two companies: Company A with Shareholders' Funds of ₹4,00,000 and Total Assets of ₹10,00,000, and Company B with Shareholders' Funds of ₹8,00,000 and Total Assets of ₹9,00,000. Compare their Proprietary Ratios and assess which company might have lower financial risk.
Compare the ratios directly.
A startup reports Shareholders' Funds of ₹1,00,000 and Total Assets of ₹2,50,000. What is the Proprietary Ratio, and what does this suggest about the startup's reliance on debt?
Analyze the result in the context of startup financing.
4 more questions in this section. Enroll free to practise them all.
Enroll free