Question

    A company with EBITDA of ₹40 lakh, interest cost of

    ₹8 lakh, and principal repayment of ₹12 lakh, has an Interest Coverage Ratio (ICR) of:
    A 3.0 Correct Answer Incorrect Answer
    B 5.0 Correct Answer Incorrect Answer
    C 2.0 Correct Answer Incorrect Answer
    D 1.5 Correct Answer Incorrect Answer
    E 4.0 Correct Answer Incorrect Answer

    Solution

    ICR = EBITDA ÷ Interest = 40 ÷ 8 = 5. Principal repayment is not considered in ICR calculation.

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