n NISM Certifications
XV NISM Series XV
Medium

M/s CORE INDUSTRIES has debt of Rs. 3500 crores at 8% p.a. interest. If EBIT is Rs. 320 crores, calculate the Interest Coverage Ratio (ICR).

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    2.70

  2. 1.14

    Correct answer

  3. C

    2.23

  4. D

    1.77

Why this is the answer

Interest Expense = 3500 × 8% = 280 crores. ICR = EBIT / Interest = 320 / 280 = 1.14.

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