Cash Coverage Ratio Calculator
Cash Coverage Ratio Calculator
Component |
Description |
Cash and Cash Equivalents |
The total amount of cash and liquid assets a company holds. |
Operating Cash Flow |
The cash generated from a company’s normal business operations. |
Current Liabilities |
The total short-term liabilities a company must pay within a year. |
Cash Coverage Ratio |
A measure of a company’s ability to pay off its short-term liabilities with its cash and operating cash flow. |
Formula |
Cash Coverage Ratio = (Cash and Cash Equivalents + Operating Cash Flow) / Current Liabilities |
Purpose |
Used to assess a company’s liquidity and short-term financial health. |