This formula reflects a company's ability to use its cash flow from operations to pay off its debt. A higher cash flow coverage ratio is more promising and indicates a company doesn't have to ...

If a company’s ratio is below one, it will likely need to spend some of its cash reserves to meet the difference or borrow more. What Are the Limitations of the Interest Coverage Ratio?

Finally, the operating cash flow ratio compares a company’s active cash flow from operating activities (CFO) to its current liabilities. This allows a company to better gauge funding ...