----------------------------------
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
Google Feed burner is free & allows to
directly deliver any new post on this blog to your email this is all for
new bloggers .If you are interested kindly enter your Email in the
“Subscribe Via Email” on the top left hand side of the
navigation menu’s.
Related Articles
