Which of the following is the test of the long term liquidity of a business ........

Accountancy (Phase -I & II) Ratio analysis

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Which of the following is the test of the long term liquidity of a business?

Interest coverage ratio

Stock turnover ratio

Operating ratio

Current ratio

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Explanation:

Interest coverage ratio is equal to earnings before interest and taxes (EBIT) for a time period, often one year, divided by interest expenses for the same time period. The interest coverage ratio is a measure of the number of times a company could make the interest payments on its debt with its EBIT.