Question 31 A Chapter 4 of +2-B – USHA Publication 12 Class

Question 31 A Chapter 4 of +2-B

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.

 

The solution of Question 31 A Chapter 4 of +2-B: – 

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    



What are Liquidity Ratios – Formulas and Examples

Comment if you have any question.

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 31 A Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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