87. The net profit (after tax) of a company is ₹2,10,000 and its fixed interest charges on long-term borrowings are ₹50,000. If the rate of income-tax is 30%, the interest coverage ratio of the company is :

CS Executive · Cost and Management Accounting · PYQS · June 2021
87. The net profit (after tax) of a company is ₹2,10,000 and its fixed interest charges on long-term borrowings are ₹50,000. If the rate of income-tax is 30%, the interest coverage ratio of the company is :
(A) 3.2 times
(B) 4.2 times
(C) 6.0 times
(D) 7.0 times

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Financial Statement Analysis

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