Which of the following leverage/coverage ratios does not have a benchmark?
a. Interest coverage
b. Debt-to-equity
c. Debt-to-EBITDA
d. Debt-to-total capital
Out of All four ratio,
A. Interest Coverage ration does not have a Benchmark.
As ,The interest coverage ratio (ICR) is a measure of a company's ability to meet its interest payments. 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. It determines how easily a company can pay interest expenses on outstanding debt.
Interest coverage ratio is also known as interest coverage, debt service ratio or debt service coverage ratio.
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