What is the interest coverage ratio ICR used to measure in financial management ........

Business Studies (CUET) FINANCIAL MANAGEMENT

What is the interest coverage ratio (ICR) used to measure in financial management?

Ability to cover interest obligations

Liquidity of current assets

Return on investment

Total borrowing capacity

The interest coverage ratio (ICR) measures a firm's ability to cover its interest obligations.

It is calculated as EBIT divided by interest expenses.

A higher ICR indicates a lower risk of failing to meet interest payments.

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