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Friday, June 10, 2011

Cash Flow to Debt Ratio Analysis

Definition: Cash Flow to Long Term Debt Ratio compares the operating cash flow of a firm to its total debt (which includes short-term debt, the current portion of long-term debt and long-term debt). This indicates the firm's ability to cover total debt payment with its cash flow generated from operating activities.

Cash Flow to Debt = Cash flow / Total debt

Example 1:
Golden Industries


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