Question

A firm’s balance sheet shows: • Current

assets: ₹400 lakh • Current liabilities: ₹250 lakh • Inventory: ₹100 lakh • Total debt: ₹500 lakh • Net worth: ₹300 lakh • EBIT: ₹90 lakh • Interest: ₹30 lakh Calculate: (a) Quick Ratio (b) Debt-Equity Ratio (c) Interest Coverage Ratio

A 1.2; 1.67; 3

B 1.5; 1.5; 2

C 1.0; 2.0; 2.5

D 1.8; 1.0; 3.5

E 1.5; 1.25; 3

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A firm’s balance sheet shows: • Current

Solution