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Question 31 A Chapter 4 of +2-B
II. Solvency (Long-Term) Ratio
31A. (Interest Coverage Ratio) Net profit before interest and tax ₹ 2,00,000, 10% long term debt ₹ 5,00,000. Calculate interest coverage ratio.
| Interest Coverage Ratio | = | Net profit before interest and tax |
| Interest |
| Proprietary Ratio | = | ₹ 2,00,000 |
| ₹ 50,000* | ||
| = | 4 times |
| * Interest | = | 10% Interest on Long term debt | ||
| = | ₹ 5,00,000 | X | 10 | |
| 100 | ||||
| * Interest | = | ₹ 50,000 |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Question 31 A Chapter 4 of +2-B - USHA Publication 12 Class", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to USHA Publication Part 2 volume I.
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