Cash Debt Coverage Ratio

From Financial Literacy Wiki

Cash Debt Coverage Ratio is calculated by taking cash flow from operations divided by Average Total Liabilities. It is a measure of entity's ability to generate cash flow solely from its operations to meet all its obligations. A general rule of thumb is that a ratio below 0.20 is a cause for concern.

It is best to compare this ratio to those of other companies from the same industry as cash flow operations is sensitive to the general economic environment that the industry operates in.