Question

According to the ratings agency, Crisil, the food and grocery players will cap their debt raising in FY 25 in order to ensure that one of the key debt protection metrics, the interest cover, remains healthy in line with the previous fiscal’s level of 13 times.

You are required to give the formula to calculate the interest cover.

Answer 1

Interest Coverage Ratio = `"Earning Before Interest and Taxes (EBIT)"/"Interest Expenses"`