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Series : Ratio Analysis (15 th Post)
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Analysis: Operating Performance Ratios
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Series : Ratio Analysis (15 th Post)
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This Ratio helps us to understand the how
easily a company can pay its Debt from the Operating Cash Flow its generates or
ratio provides an indication of a companys ability to cover total debt with its
yearly cash flow from Operations.
A low Cash Flow to debt ratio means company is
not able to available to meet its debt payments. The Higher the percentage
Ratio the better the companys ability to
carry out its total debt.
Formula: Cash Flow to Debt Ratio % = Operating Cash Flow / Total
Debt
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Next Post on Ratio
Analysis: Operating Performance Ratios
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