Question

Assume that you want to use some financial ratios from analysis, what are some of the financial ratios that comes from the statement of cash flows?

Answer 1

Cash Flow Ratios Summary:

Operating Cash Flow Ratio=Cash Flow from Operations (CFO) /Sales

Asset Efficiency Ratio =CFO / Total Assets

Current Liability Coverage Ratio =CFO / Current Liabilities or (CFO – Dividends Paid) / Current Liabilities

Long Term Debt Coverage Ratio= CFO / Long Term Debt

Interest Coverage Ratio =(CFO + Interest Paid + Taxes Paid) / Interest Paid

Cash Generating Power Ratio= CFO / (CFO + Cash from Investing Inflows + Cash from Financing Inflows)

External Financing Index Ratio =Cash from Financing / CFO