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    • Question

      A firm’s EBIT is ₹5,00,000. It pays ₹50,000 in

      interest and ₹1,20,000 in tax. What is the Interest Coverage Ratio?
      A 5.0 Correct Answer Incorrect Answer
      B 8.0 Correct Answer Incorrect Answer
      C 10.0 Correct Answer Incorrect Answer
      D 3.5 Correct Answer Incorrect Answer
      E 6.0 Correct Answer Incorrect Answer

      Solution

      Interest Coverage Ratio = EBIT / Interest = ₹5,00,000 / ₹50,000 = 10.0

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