A higher value of interest coverage ratio indicates relative to debts.

lower profits

No worries! We‘ve got your back. Try BYJU‘S free classes today!

higher profits

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

average profits

No worries! We‘ve got your back. Try BYJU‘S free classes today!

no profits

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B higher profits
Interest coverage ratio express the relationship between net profit before interest and tax and interest payable on long term debts. A higher value of interest coverage ratio indicates higher profits relative to debts.

Suggest Corrections

Similar questions

A higher value of interest coverage ratio ratio indicates __________ relative to debts.

From the following details, calculate interest coverage ratio: Net Profit after tax Rs. 60,000; 15% Long-term debt 10,00,000; and Tax rate 40%.

Join BYJU'S Learning Program