Question
Which of the following financial ratios is most
indicative of a firm's ability to service long-term debt obligations, especially in light of the declining cash flow from operations post-COVID?Solution
The Interest Coverage Ratio (ICR) measures a firm’s ability to meet its interest obligations from its operating income. In situations where MSMEs face declining cash flows, this ratio becomes crucial as it indicates how many times the firm can cover its interest payments with earnings before interest and taxes (EBIT).
More Financial Management Questions
Which of the given figures when placed in the 5th position would continue the series that is established by the first four figures?
Identify the figure that completes the pattern.
Select the figure from the options that can replace the question mark (?) and complete the pattern (No rotation allowed).
In the following questions select the related figure from the given alternatives.
Question figure:
