Calculate interest coverage ratio for KPJ 2020?

The **Interest Coverage Ratio (ICR)** is a financial metric used to assess a company's ability to pay interest on its outstanding debt. It is calculated using the following formula:

\[
\text{Interest Coverage Ratio} = \frac{\text{EBIT}}{\text{Interest Expense}}
\]

Where:
- **EBIT** stands for *Earnings Before Interest and Taxes*, also known as operating income.
- **Interest Expense** refers to the interest payments the company needs to make on its debt.

### To calculate the Interest Coverage Ratio for KPJ in 2020:
1. **Obtain the following values from KPJ's 2020 financial statements:**
   - EBIT (Earnings Before Interest and Taxes)
   - Interest expense

2. **Plug the values into the formula.**

If you provide the relevant financial information, I can perform the calculation for you.

Would you like to provide those numbers or have me assist further with locating them?

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Here are some related questions to explore:

1. What does a high or low interest coverage ratio indicate for a company?
2. How does EBIT differ from net income?
3. What other ratios are important when evaluating a company's financial health?
4. How does an interest coverage ratio affect a company's credit rating?
5. What industries tend to have higher or lower interest coverage ratios?

**Tip:** A healthy interest coverage ratio is typically above 2, but it can vary by industry.

Learn how to calculate KPJ's interest coverage ratio for 2020 using the formula EBIT / Interest Expense. This financial ratio is crucial for evaluating a company's ability to cover its interest obligations. Key financial data such as EBIT and interest expense are used. Ideal for finance students and professionals.

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