GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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3 or 4
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4 or 5
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5 or 6
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6 or 7
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Detailed explanation-1: -An FCCR of 1 means you have just enough earnings before interest and taxes to meet them. An FCCR of 2 shows you could pay them all two times over. The ideal FCCR varies by industry, but many lenders look for borrowers to have a ratio of at least 1.2.
Detailed explanation-2: -Interest Coverage Ratio Example Amount (Rs.) As per the result, the interest coverage ratio is 6 times which indicates ABC can meet its interest cost 6 times over. The ABC company is in a good position.
Detailed explanation-3: -Fixed charges (or fixed costs) are periodic business expenses independent of the business activity, in contrast to variable costs. Fixed charges include expenses such as principal and interest payments on debt, insurance, taxes, utilities, salaries, and rent and lease payments.
Detailed explanation-4: -A fixed charge is a recurring and predictable expense incurred by a firm. Unlike a variable charge, the fixed charge remains the same regardless of the amount of business conducted. More items