70 :- From the following information, Calculate Interest Coverage Ratio :
Solution :-
Net Profit before Tax and Interest = Net Profit after Tax + Tax + Interest on Long term Loan from Bank + Interest on Debentures
= 75,000 + 9,000 + 5,000 + 5,000
= Rs 94,000
Interest = Interest on Long term Loans from Bank + Interest on Debentures
= 5,000 + 5,000
= Rs 10,000
Interest Coverage Ratio = Net Profit before Tax and Interest/Interest on Long terms Loans
= 94,000/10,000
= 9.4 times