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Ratio analysis

Financial Management

Equity ratio means equity/capital employed, know, While calculating (c) proprietary ratio, (in icai Material, practical problems 7th question) we include preference shares also in equity, but in this problem they didn't consider preference share capital as a equity why sir please explain sir.…..🙏🙏🙏

Kavitha Krishnan

CA Inter

★ 665

21-Feb-24 16:49

142

Answers (7)

Please note that in Ratios Analysis chapter Proprietary Fund = Owners Gund = Own Fund = Net Worth = ESC + R&S + PSC & Equity means ESC + R&S

aditya yanamandra

Faculty

21-Feb-24 17:23

Sir here equit includes preference capital also know sir, please reply me sir

Thread Starter

Kavitha Krishnan

CA Inter

★ 665

21-Feb-24 17:31

(Updated)

With respect to the posted picture, PSC is definitely a part of Capital Employed so it’s not wrong but the general consideration what I had mentioned in the earlier answer that in general Equity means ESC and R&S, is stated in the institute material also and hence also mentioned in the videos.. but because of lack of elaboration in the material in such instances, it is creating ambiguity.. Hence for examination purpose, please go by the previous considerations stated only

aditya yanamandra

Faculty

22-Feb-24 00:14

Sir please do one video to clarify this sir please sir🙏

Thread Starter

Kavitha Krishnan

CA Inter

★ 665

22-Feb-24 07:38

I am getting lot of confusion on capital structure ratios sir, in icai Material they shown Debt includes current liabilities also sir

Thread Starter

Kavitha Krishnan

CA Inter

★ 665

22-Feb-24 07:44

Total Debt means LT debt and ST debt but for the purpose of Debt Ratios (like DE Ratio), unless otherwise specified, usually only Long term Debt is considered

aditya yanamandra

Faculty

23-Feb-24 11:53

Now I got it sir, Thank you so much sir,😊🙏......

Thread Starter

Kavitha Krishnan

CA Inter

★ 665

23-Feb-24 12:06

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