# Current Assets to Proprietor’s Fund Ratio

# Current Assets to Proprietor’s Fund Ratio:

* Current Assets to Proprietors’ Fund Ratio *establishes the relationship between current assets and shareholder’s funds.

The purpose of this ratio is to calculate the percentage of shareholders funds invested in current assets.

## Formula:

Current Assets to Proprietors Funds = Current Assets / Proprietor’s Funds

## Example:

This may be expressed either as a percentage , or as a proportion. To illustrate, if the value of current assets is $36,000 and the proprietors funds are $180,000 the relevant ratio would be calculated as follows:

Current Assets to Proprietors Funds = 36,000 / 180,000

= 0.2

This may also be expressed as 20%. It means that 20% of the proprietors funds have been invested in current assets.

## Significance:

Different industries have different norms and therefore, this ratio should be studied carefully taking the history of industrial concern into consideration before relying too much on this ratio.

### You may also be interested in other articles from “financial statement analysis” chapter:

- Horizontal and Vertical Analysis
- Ratios Analysis
- Horizontal Analysis or Trend Analysis
- Trend Percentage
- Vertical Analysis
- Accounting Ratios Definition, Advantages, Classification and Limitations:
- Gross profit ratio
- Net profit ratio
- Operating ratio
- Expense ratio
- Return on shareholders investment or net worth
- Return on equity capital
- Return on capital employed (ROCE) Ratio
- Dividend yield ratio
- Dividend payout ratio
- Earnings Per Share (EPS) Ratio
- Price earning ratio
- Current ratio
- Liquid/Acid test/Quick ratio
- Inventory/Stock turnover ratio
- Debtors/Receivables turnover ratio
- Average collection period
- Creditors/Payable turnover ratio
- Working capital turnover ratio
- Fixed assets turnover ratio
- Over and under trading
- Debt-to-equity ratio
- Proprietary or Equity ratio
- Ratio of fixed assets to shareholders funds
- Ratio of current assets to shareholders funds
- Interest coverage ratio
- Capital gearing ratio
- Over and under capitalization
- Financial-Accounting- Ratios Formulas
- Limitations of Financial Statement Analysis

### Other Related Accounting Articles:

- Fixed Assets to Proprietor’s Fund Ratio
- Fixed Assets Turnover Ratio
- Proprietary Ratio or Equity Ratio
- Return on Shareholders Investment or Net Worth Ratio
- Over trading and Under Trading
- Return on Equity Capital (ROEC) Ratio
- Dividend Yield Ratio
- Dividend Payout Ratio
- Debt Service Ratio or Interest Coverage Ratio
- Financial Accounting Ratios & Formulas

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