CASH DEBT COVERAGE RATIO Definition

Bookmark and Share

CASH DEBT COVERAGE RATIO is the ratio of net cash provided by operating activities to average total liabilities, called the cash debt coverage ratio, is a cash-basis measure of solvency. This ratio indicates a company's ability to repay its liabilities from cash generated from operating activities without having to liquidate the assets used in operations.

Learn new Accounting Terms

ASSIGNED VALUE is a value that serves as an agreed-upon reference for comparison; normally derived from or based upon experimental work of some national or international organization.

CONSIGNMENT STOCK is vendor supplied stock that is only paid for when it is used. Consignment stock should change nothing except cash flow. Holding any more stock than is necessary is always inefficient whether it is consignment stock or not.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.