Question 25 Chapter 7 -Unimax Publication Class 12 Part 2

Question 25 Chapter 7 – Unimax Publication Class 12 Part 2 – 2021

Table of Contents

25. From the following details, from the financial statements of Kiya Ltd for the year ended 31st March 2022. Calculate interest coverage ratio.

Net profit after tax 18,00,000
1,20,000, 10% debentures of 1,000 each.
Tax rate 40%

The solution of Question 25 Chapter 7 – Unimax Publication Class 12 Part 2-2021 : –

Interest coverage ratio	=	Net profit interest and tax
	=	Fixed interest charges

If profit after tax is 60, the profit before tax is 100.

If profit after tax is 1,80,000, the profit before tax is Interest 18,00,000 x 100/(60 ) = 30,00,000

Profit before tax	= 30,00,000
Add 10% Int. on debentures	= 12,00,000

Thanks, Please Like and share with your friends

Comment if you have any Doubts.

Accounting Ratios – Meaning and Definition

Chapter No. 1 – Company Accounts (Share Capital)
Chapter No. 2 – Company Accounts (Issue of Debentures)
Chapter No. 3 – Company Accounts (Redemption of Debentures)
Chapter No. 4 – Financial Statements of a Company
Chapter No. 5 – Financial Statement Analysis
Chapter No. 6 – Tools of Financial Statement Analysis- Comparative and Common Size
Chapter No. 7 – Ratio Analysis
Chapter No. 8 – Cash Flow Statement

Advertisement-X