(i) Proprietary ratio: Proprietary ratio gives the proportion of shareholders' funds to total assets. Proprietary ratio shows the extent to which the total assets have been financed by the shareholders' funds. It is calculated as follows:
Proprietary ratio = \(\frac { Shareholders's\quad funds }{ Total\quad assets } \).
(ii) Capital gearing ratio: Capital gearing ratio is the proportion of fixed income bearing funds to equity shareholders' funds. Fixed income bearing funds include fixed interest and fixed dividend bearing funds. It is calculated as follows:
Capital gearing ratio = \(\frac { Funds\ bearing\ fixed\ interest\ or\ fixed\ dividend }{ Equity\ shareholders'\ funds } \)

The share capital of a company is divided into the following categories:
(i) Authorised capital
It means such capital as is authorised by the memorandum of association. It is the maximum amount which can be raised as capital. It is also known as registered capital or nominal capital.
(ii) Issued capital
This represents that part of authorised capital which is offered for subscription.
(iii) Subscribed capital It refers to that part of issued capital which has been applied for and also allotted by the company.
(iv) Called up capital It refers to that part of subscribed capital which has been called up by the company for payment.
(v) Paid up capital
It is that part of called up capital which has been actually paid by the shareholders.
(vi) Reserve capital
The company can reserve a part of its subscribed capital to be called up only at the time of winding up. It is called reserve capital.

Following are the limitations of financial statement analysis
(i) All the limitations of financial statements such as ignoring non-monetary information, ignoring price level chances, etc., are applicable to financial statement analysis also.
(ii) Expert knowledge is required in analysing the financial statements.
(iii) Interpretation of the analysed data involves personal judgement as different experts may give different views

The values highlighted are
(i) Social responsibility towards society.
(ii) Sensitivity towards cleaner environment

Calculation of Profit

Values involved are
(i) Violating child labour act by employing 10 year old boy.
(ii) By providing good quality product she is promoting the welfare and health of society
(iii) By charging reasonable prices she is not indulged in profiteering.

(i) Under this method, only one capital account is maintained for each partner.
(ii) The capital is changing from period to period.
(iii) This capital account shows always a credit balance
(iv) All adjustment relating to partners are recorded directly in the capital account.

(i) Under this method, goodwill is calculated by multiplying the weighted average profit by a certain number of years of purchase.
(ii) Goodwill = Weighted average profit x Number of years of purchase
(iii) In this method, weights are assigned to each year's profit. Weighted profit is ascertained by multiplying the weights assigned with the respective year's profit.
(iv) The sum of the weighted profits is divided by the sum of weights assigned to determine the weighted average profit
Weighted average profit
\(=\frac{Total\ of\ weighted\ profits}{Total\ of\ weights}\)