NextMockપરીક્ષાઓ શોધો, દા.ત. SSC CGL, UPPSC, Lekhpal
UPSC PYQPrelims 2020

Civil Services Examination · પ્રશ્ન 62

What is the importance of the term "Interest Coverage Ratio" of a firm in India? 1. It helps in understanding the present risk of a firm that a bank is going to give loan to. 2. It helps in evaluating the emerging risk of a firm that a bank is going to give loan to. 3. The higher a borrowing firm's level of Interest Coverage Ratio, the worse is its ability to service its debt. Select the correct answer using the code given below:

  1. 1 and 2 only
  2. 2 only
  3. 1 and 3 only
  4. 1, 2 and 3
જવાબ બતાવો અને સમજૂતી

જવાબ: (A) 1 and 2 only

સમજૂતી

ICR = EBIT / interest expense; it shows both current and emerging repayment risk. A higher ICR means a better, not worse, ability to service debt.