On the basis of following information, answer the questions:

On basis of above case, the interest coverage ratio is:

10 times

The correct answer is option 4- 10 times.

Interest coverage ratio = Profit before interest and tax/ Interest charges
                                      = 3,90,000/39,000
                                     = 10 times

* Interest on debentures = 3,00,000 x 13/100
                                      = ₹39,000

* Profit before interest and tax = Profit before tax + interest
                                                 = 3,51,000 + 39,000
                                                 = 3,90,000