Return on Proprietors Fund

Return on Proprietors Fund Ratio = Net Profit After tax x 100
                                     Proprietors Fund

This ratio is of practical importance to the proprietors as well as prospective investors. It enables them to compare the earning capacity of the enterprise with that of other enterprise. there should be a minimum return on investment to shareholders. bankers and financers will not be ready to finance if it does not show adequate profit.

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