Cash Debt Coverage Ratio

Cash Debt Coverage Ratio is a cash-basis ratio used to evaluate solvency, calculated as cash provided by operating activities divided by average total liabilities.

Cash Debt Coverage Ratio

Cash Debt Coverage Ratio is a cash-basis ratio used to evaluate solvency, calculated as cash provided by operating activities divided by average total liabilities.


Cash Debt Coverage Ratio Formula

The formula for Cash Debt Coverage Ratio is the ratio of net cash provided by operating activities to average total liabilities

Cash Debt Coverage Ratio Interpretation

The Cash Debt Coverage Ratio is a cash-basis measure of solvency. This ratio indicates a company's ability to repay its total liabilities (short term and long term) from cash generated from operating activities without having to liquidate the assets used in operations.

Cash Debt Coverage Ratio is similar to another metric called Current Cash Debt Coverage Ratio.  The Current Cash Debt Coverage Ratio is used to evaluate solvency, calculated as cash provided by operating activities divided by average current liabilities (as opposed to average total liabilities).

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