General Studies · Financial Management
Given below are two statements: Statement I: Interest coverage ratio indicates how many times fixed interest charges are earned, based on the earnings available to pay these expenses. Statement II: One minus the reciprocal of the interest coverage ratio indicates how far earnings could decline before it would be impossible to pay the interest charges from current earnings. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both Statement I and Statement II are true✓
- 2Both Statement I and Statement II are false
- 3Statement I is true but Statement II is false
- 4Statement I is false but Statement II is true
Correct answer
Both Statement I and Statement II are true
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