Net Profit after tax of PQR Limited was 6,00,000, for the year ended March 31, 2019.
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Question:
Net Profit after tax of PQR Limited was ₹ 6,00,000, for the year ended March 31, 2019. The company has ₹ 80,00,000 12% Debentures of ₹ 100 each. Calculate Interest Coverage Ratio assuming 50% tax rate. State its significance also. Will the Interest Coverage Ratio change if during the year 2018-19, the company decides to redeem debentures of ₹ 10,00,000 and expects to maintain the same rate of Net Profit and assume that the Tax rate will not change?
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
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