Wize University Introduction to Financial Accounting Textbook > The Cash Flow Statement
Cash Current Debt Coverage Ratio
Popular Courses
ACCT 2301
The University of Texas at Dallas
Intro to Financial Accounting
General Course
COMM 293
University of British Columbia
Intro to Financial Accounting
University Study Guides
MGCR 211
McGill University
ACCT 1220
University of Guelph
Intro to Financial Accounting
University Study Guides
ACCT 217
University of Calgary
ADMS 2500
York University
ACCTG 211
University of Alberta
COMM 111
Queen's University
ADM 1340
University of Ottawa
BU127
Wilfrid Laurier University
ACCT 2301
Houston
ACCT 2301
Houston
COMM 1101
Dalhousie University
AFM 101
University of Waterloo
AFA 100
Toronto Metropolitan University
BUSINESS 3321K
Western University
ACCT-1510
University of Windsor
0:00 / 0:00
Cash Current Debt Coverage Ratio
This cash current debt coverage ratio is a liquidity ratio that measures how many times a company can pay its current liabilities using cash from operations.
Interpreting the Ratio
- Ratio > 1: This means the company earned enough cash from its primary operations to pay its current liabilities.
- Higher ratio means better liquidity
- Ratio < 1: This means that the company will require non-operating cash flows or cash from previous periods to pay its current liabilities.
- Lower ratio means weaker liquidity.
0:00 / 0:00
Example: Cash Current Debt Coverage Ratio
Compute and interpret the cash current debt coverage ratio for the year ended September 28, 2019.
Practice: Cash Current Debt Coverage Ratio
Compute the cash current debt coverage ratio for the year 2020. Do not round your work, round your final answer to 2 decimal places and enter you answer in decimal form.
Compute the cash current debt coverage ratio for 2020.