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    Question

    A firm has EBIT ₹2,50,000 and interest expense

    ₹50,000. Interest coverage ratio (EBIT/Interest) is:
    A 5.0 Correct Answer Incorrect Answer
    B 4.0 Correct Answer Incorrect Answer
    C 3.0 Correct Answer Incorrect Answer
    D 2.0 Correct Answer Incorrect Answer

    Solution

    Interest Coverage Ratio = EBIT / Interest Expense = 2,50,000 / 50,000 = 5.0.

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