CMA Intermediate · Financial Management and Business Data Analytics · Sources of Finance
Gupta Foods Ltd has total funds of Rs 50,00,000 comprising equity share capital Rs 20,00,000, reserves Rs 10,00,000, 10% debentures Rs 15,00,000 and a term loan Rs 5,00,000. What percentage of total funds is owners' funds?
Owners' funds are 60% of total funds. Equity capital of Rs 20 lakh plus reserves of Rs 10 lakh give Rs 30 lakh, which divided by Rs 50 lakh total funds equals 60%. Debentures and the term loan are borrowed funds, not owners' funds.
- A40%
- B60%Correct
- C70%
- D30%
Explanation
Owners' funds = equity share capital 20,00,000 + reserves 10,00,000 = 30,00,000. Percentage = 30,00,000/50,00,000 = 60%. The 40% option is only the equity share capital ratio, ignoring reserves.
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