The Proprietary Ratio measures:
ASales per share
BProportion of debt to equity
CProportion of total assets financed by shareholders
DProfit margin per share
Answer & Solution
Correct answer: C. Proportion of total assets financed by shareholders
1. Proprietary Ratio = Proprietary Fund / Total Assets.
2. Proprietary Fund = Equity + Preference + Reserves.
3. Higher ratio = less risky scenario for outside lenders.
_Source: ICAI BoS CA Inter Paper 6A, Ch 3 "Financial Analysis and Planning — Ratio Analysis", §3.2.1(f)_