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Question

Which of the following ratios are taken into consideration by a banker before sanctioning the loan?

A
Proprietory Ratio
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B
Stock-Turnover Ratio
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C
Debt-Service Coverage Ratio
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D
All of the above
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Solution

The correct option is C Debt-Service Coverage Ratio
Debt service coverage ratio is also known as debt coverage ratio. Generally this ratio gives an idea to the bankers about lenders that how many times lender can make loan payment with there net income.

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