67 :- From the following information, calculate Interest Coverage Ratio: Net Profit after Tax Rs 4,25,000;
Tax Rs 75,000; Interest on Long – term Funds Rs 1,25,000.
Solution :-
Net Profit before Interest and Tax = Net Profit after Tax + Tax + Interest
= 4,25,000 + 75,000 + 1,25,000
= Rs 6,25,000
Interest Coverage Ratio = Profit before Interest and Tax/Interest on Long – term Loans
= 6,25,000/1,25,000
= 5 times