https://file.aiquickdraw.com/mathbot/file/1726596802782mat2bz45.jpg

calculate the Proprietary Ratio
Shareholders’ Equity
------------------------
Total Assets
Total Assets Fixed Assets + Current Assets
3. Capital Gearing Ratio
Preference Share Capital + Non-Current Liabilities
--------------------------------------------------------------------
Equity Share Capital + Reserves and Surplus
Coverage Ratios
1. Debt Service Ratio
Net Profit before Interest and Income Tax
----------------------------------------------------------
Interest for 5 years

I've opened the image, and I will now calculate the requested ratios based on the data provided:

1. **Proprietary Ratio** = \(\frac{\text{Shareholders' Equity}}{\text{Total Assets}}\)
   - Shareholders' Equity: This can be taken as **Total Shareholders' Funds** from the balance sheet.
   - Total Assets: This includes **Fixed Assets** and **Current Assets**.

2. **Capital Gearing Ratio** = \(\frac{\text{Preference Share Capital + Non-Current Liabilities}}{\text{Equity Share Capital + Reserves and Surplus}}\)
   - Non-Current Liabilities are provided.
   - Equity Share Capital and Reserves and Surplus are needed.

3. **Debt Service Ratio** = \(\frac{\text{Net Profit before Interest and Income Tax}}{\text{Interest for 5 years}}\)

I will now extract the required data from the balance sheet for each of these ratios and perform the calculations.Here are the calculated financial ratios based on the provided balance sheet dataHere are the calculated financial ratios based on the provided balance sheet 

1. **Proprietary Ratio** = 0.508 (approximately 50.8%)  
   \[
   \frac{1795.69}{1538.49 + 1999.40}
   \]

2. **Capital Gearing Ratio** = 0  
   Since there are no preference shares or non-current liabilities, the ratio is 0.

3. **Debt Service Ratio** = 0.629  
   \[
   \frac{126.26}{54.17 + 64.48 + 82.00}
   \]

Would you like any further details or clarifications on these calculations?

Here are five questions to expand your understanding:
1. What does a proprietary ratio over 50% indicate about a company's financial stability?
2. How does the absence of non-current liabilities affect the capital gearing ratio?
3. What is a healthy debt service ratio, and how does this compare?
4. How can equity and reserves be optimized to improve the capital gearing ratio?
5. Why might a company choose to avoid issuing preference shares?

**Tip:** A higher proprietary ratio implies that the company is less reliant on borrowed funds, suggesting financial stability.

calculate the Proprietary Ratio, Capital Gearing Ratio, and Debt Service Ratio using the provided balance sheet data.

This webpage calculates key financial ratios using a provided balance sheet, including the proprietary ratio (50.8%), capital gearing ratio (0 due to no preference shares or non-current liabilities), and debt service ratio (0.629). Understand how to compute these ratios step by step.

Math Problem Statement

calculate the Proprietary Ratio Shareholders’ Equity

Total Assets Total Assets Fixed Assets + Current Assets 3. Capital Gearing Ratio Preference Share Capital + Non-Current Liabilities

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