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

Question

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
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.

Accepted Answer

(A) 1 and 2 only

Answer

(B) 2 only

Answer

(C) 1 and 3 only

Answer

(D) 1, 2 and 3