Question
XYZ Ltd. is a medium-sized manufacturing company. Its
summarized Balance Sheet and additional financial information for the year ended 31st March 2024 are given below. Use this data to answer the following independent questions. Balance Sheet of XYZ Ltd. (as on 31st March 2024) Additional Information (from P&L A/c) • EBIT = ₹12,00,000 • Provision for tax = 40% Calculate the Interest Coverage Ratio (ICR) of XYZ Ltd.Solution
ICR = EBIT ÷ Interest = 12,00,000 ÷ 72,000 = 16.67 ≈ 16 timesÂ
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