Interest coverage ratio of 6 indicates :

CS Executive · Financial and Strategic Management · PYQS · December 2019
Interest coverage ratio of 6 indicates :
(A) Sales are 6 times of interest.
(B) Profit after tax is 6 times of interest.
(C) EBIT is 6 times of interest.
(D) Interest is 6 times profit after tax.

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Financial Management

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