What is the importance of the term "Interest Coverage Ratio" of a firm in India? 1. It helps in understanding the present risk of a firm that a bank is going to give loan to. 2. It helps in evaluating the emerging risk of a firm that a bank is going to give loan to. 3. The higher a borrowing firm's level of Interest Coverage Ratio, the worse is its ability to service its debt. Select the correct answer using the code given below:

Sign up to view the correct answer and detailed explanation.

UPSC Question: What is the importance of the term "Interest Coverage Ratio"...

What is the importance of the term "Interest Coverage Ratio" of a firm in India?

It helps in understanding the present risk of a firm that a bank is going to give loan to.
It helps in evaluating the emerging risk of a firm that a bank is going to give loan to.
The higher a borrowing firm's level of Interest Coverage Ratio, the worse is its ability to service its debt. Select the correct answer using the code given below: