----------------------------------
Series : Ratio Analysis (22 th Post)
-------------------------------
Is the
company generating enough cash to meet its Liabilities & fund operating
cost ?
This ratio
helps us to understand the ability of
the company Operating cash flow(Cash
flow generated from main operations ) to meet its obligations which includes Liabilities and to keep the business
funded.
Ideally
larger the ratio the better.
Formula: Short
Term Debt Coverage: Operatinng Cash Flow/Short Term Debt
Capital Expenditure
Coverage=Operating Cash Flow/ Capital Expenditure
Divident Coverage=Operating
Cash flow/Cash Dividents
Next Post on Ratio Analysis: Cash
Flow Indicator Ratios: Dividend Payout Ratio
--------------------------------------------------------------------------------------------
In my quest for learning value investing I came across Ratio Analysis
& the importance of these ratios in analyzing a stock these ratios are easy
to understand & give very good insights into a companys operations and its
growth , would like to share this with the community
Comments / Improvements and
points worth considering are welcome
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directly deliver any new post on this blog to your email this is all for
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