How to analyze the cash flow to debt ratio

Cash flow ratio.

Formula: Cash Flow Ratio Operating Cash Flow Current Liabilities.

Note (1) "Operating cash flow" in the formula, which usually uses a cash flow statement.

Net cash flow from operating activities.

2) In general, the current liabilities in this ratio are at the end of the period rather than the average.

This is because it is the closing amount that needs to be repaid, not the average balance.

What it means: The cash flow ratio indicates the degree of protection of operating cash flow per 1 yuan of current liabilities. The higher the ratio, the more secure the debt repayment.

The net cash flow debt ratio is the ratio of net cash flow from operating activities to total liabilities"Total liabilities"It can be the total debt at the end of the year or the average total debt for the whole year. This ratio reflects the company's ability to repay all of the company's debts with the net cash flow generated by annual operating activities, and reflects the company's debt repayment risk.

Generally speaking, the larger the ratio, the greater the company's solvency and the smaller the corresponding risk. The smaller the ratio, the smaller the solvency and the greater the corresponding risk. SAIC.

The net cash flow debt ratio for 2000 was, but as described above"Cash flow ratio. "If these unconventional factors are not considered, the company's solvency will be relatively high.

What is the cash inflow liability ratio and how is it calculated?

1.Formula: Cash-to-debt ratio = annual net cash flow from operating activities.

Current liabilities at the end of the period.

Standard values set by the enterprise:

Significance: Reflects the degree to which the cash generated by operating activities protects current liabilities.

2.The cash inflow to liability ratio is the cash flow debt ratio.

Definition: The cash-flow-liability ratio is the ratio of the net operating cash flow to the current liabilities of an enterprise in a certain period, which can reflect the ability of the enterprise to repay short-term liabilities in the current period from the perspective of cash flow.

Calculation formula: cash flow to liabilities ratio = annual net cash flow from operating activities current liabilities at the end of the year.

Net cash flow from operating activities is the gross cash flow from operations less working capital.

the cash flow that can be provided by the enterprise after the increase".

EBIT + depreciation and amortization is the gross operating cash flow.

Cash Flow Debt Ratio: Net Cash Content from Operating Activities, Current Liabilities, Cash Flow Debt Ratio, 2014 2013 Analysis.

The cash-flow-liability ratio is the ratio of net operating cash flow to current liabilities in a certain period. From the perspective of cash flow, the ability of the enterprise to repay short-term liabilities in the current period can be reflected in the calculation formula: cash flow liability ratio = annual net operating cash flow Current liabilities at the end of the year 100% For creditors, the higher the cash ratio, the better, greater than 1 means that the enterprise can repay the current liabilities only by cash in hand, which is of course the best.

Cash flow liabilitiesHowever, for firms, the opposite is true, because the liquidity of assets is inversely proportional to their profitability, and maintaining the most liquid cash will reduce the profitability of the firm, so firms are reluctant to have too high cash ratios, bank deposit balance reconciliations, cheque cashing, endorsements, and transfers are all the focus of this chapter. The financial ratio analysis of the cash flow statement mainly examines and evaluates the company's ability to pay and repay, and the main ratio indicators are the cash flow liability ratio and the cash maturity debt ratio.

1. Cash flow ratio = net cash flow from operating activities Current liabilities at the end of the period.

2. Cash ratio = (monetary funds + trading financial assets) Current liabilities.

3. Cash flow debt ratio = annual net operating cash flow 100% current liabilities at the end of the year.

Operating cash flow ratio and cash flow ratio are the same concept, and the others are different concepts.

Differences: 1. Operating cash flow ratio (operatingcashflow

Ratio) is the value of cash flow compared to other project data. That is, the operating cash flow ratio.

Formula: Cash Flow Ratio = Net Cash Flow from Operating Activities Current Liabilities at the End of the Period.

2. The cash ratio measures the liquidity of the company's assets by calculating the ratio of the company's cash and total cash equivalent assets to the current current liabilities.

Formula: Cash Ratio = (Monetary Funds + Trading Financial Assets) Current Liabilities.

3. The cash flow liability ratio is the ratio of the net operating cash flow to the current liabilities of the enterprise in a certain period, which can reflect the ability of the enterprise to repay short-term liabilities in the current period from the perspective of cash flow.

Formula: Cash Flow Debt Ratio = Annual Net Operating Cash Flow Current Liabilities 100% at the end of the year.

The analysis of the cash-to-debt ratio examines the actual solvency of an enterprise from the perspective of the dynamics of cash inflows and outflows, and reflects the multiple of the net cash flow generated by operating activities in the current period that is sufficient to cover the current liabilities. Since the net profit and the net cash flow generated by operating activities may deviate, and there may not be enough cash (including cash equivalents) to repay debts in profitable years, the use of the cash liability ratio index measured on the basis of cash basis can fully reflect the net cash flow generated by the company's operating activities, and the extent to which the repayment of current liabilities can be guaranteed, which intuitively reflects the actual ability of the enterprise to repay current liabilities.

Extended Information] Cash flow liability ratio is the ratio of the net operating cash flow to current liabilities of an enterprise in a certain period, which can reflect the ability of an enterprise to repay short-term liabilities in the current period from the perspective of cash flowInvestment and financing activities only play an auxiliary role and their cash flows are accidental and abnormal, so it is more comparable to use the cash flow generated by operating activities to evaluate the performance of enterprises. Since advance receivables do not need to be repaid in cash in the current period, they should be deducted from current liabilities when measuring the short-term solvency of enterprises.

In addition, the net cash flow from operating activities is the operating result of the past fiscal year, while the current liabilities are the debts that need to be repaid in the next fiscal year, and the accounting periods are different.

Cash flow debt ratio = annual net operating cash flow Current liabilities at the end of the year 100%; Annual net operating cash flow refers to the difference between the inflow and outflow of cash and cash equivalents generated by the operating activities of an enterprise in a certain period. This indicator examines the actual solvency of a company from the perspective of the dynamics of cash inflows and outflows.

It is a measure of the net cash flow generated by operating activities. The cash flow of an enterprise is divided into three categories, namely, cash flow from operating activities, cash flow from investment activities, and cash flow from financing activities. The value used to calculate the cash flow liability ratio of a business is only the cash flow from operating activities.

This is because the cash flow of an enterprise** mainly depends on the operating activities of the enterprise, and the financial status of the enterprise is mainly evaluated to measure the performance of the operating activities of the enterprise. Investment and financing activities only play an auxiliary role and their cash flows are accidental and abnormal, so it is more comparable to use the cash flow generated by operating activities to evaluate the performance of enterprises.

The formula for calculating the cash flow debt ratio:Cash flow debt ratio = annual net operating cash flow Current liabilities at the end of the year 100% significance: The cash flow liability ratio index measured on the basis of the cash basis can fully reflect the net cash flow generated by the company's operating activities, and the extent to which the repayment of the current liabilities can be guaranteed, which intuitively reflects the actual ability of the enterprise to repay the current liabilities.

Generally, this indicator is greater than 1, indicating that the repayment of the company's current liabilities is reliably guaranteed. The larger the index, the more net cash flow generated by the company's operating activities, the more it can ensure that the enterprise can repay the due debts on time, but it is not the bigger the better, and the indicator is too large to indicate that the company's liquidity is not fully utilized and the profitability is not strong.

The cash-flow-liability ratio is the ratio of the net operating cash flow to the current liabilities of an enterprise in a certain period, which can reflect the ability of the enterprise to repay short-term liabilities in the current period from the perspective of cash flow. Cash flow debt ratio = annual net operating cash flow Current liabilities at the end of the year 100%;

1) Solvency analysis.

When analyzing the solvency of an enterprise, it is first necessary to see whether the cash income obtained by the enterprise in the current period has sufficient cash to repay the debts due after meeting the cash expenditure required for production and operation. On the basis of having a balance sheet and an income statement, it can be analyzed with the following two ratios:

1.Short-term solvency 2: Net cash flow from operating activities Current liabilities.

The ratio of net cash flow from operating activities to current liabilities is an indicator that creditors are very concerned about, which reflects the ability of an enterprise to repay its short-term debts and is a dynamic indicator to measure the short-term solvency of an enterprise. The higher the value, the better the short-term solvency of the enterprise, and vice versa, the poor short-term solvency of the enterprise.

2.Long-term solvency 2: Net cash flow from operating activities Total liabilities.

The ratio of net cash flow from operating activities to total debt reflects the ability of the enterprise to repay all debts with cash obtained from operating activities.

The higher the value of the above two ratios, the stronger the company's ability to repay its debts. However, the higher the value of these two ratios, the better, because cash is less profitable.

2.Ability to pay cash dividends II.

Cash flow debt ratio = annual net operating cash flow Current liabilities at the end of the year 100%;

Net operating cash flow refers to the difference between the inflow and outflow of cash and cash equivalents generated by the operating activities of an enterprise in a certain period. This indicator examines the actual solvency of enterprises from the perspective of the dynamics of cash inflows and outflows.

Year-end current liabilities refer to the debts that will be repaid within one year or more of a business cycle. Theoretically, current liabilities and current assets are closely related, and the comparison of the two can roughly understand the short-term solvency and liquidation ability of enterprises. Current liabilities include:

Short-term borrowings, accounts payable, notes payable, wages payable, etc.

The use of the cash liability ratio measured on the basis of the cash basis can fully reflect the net cash flow generated by the company's operating activities, and the extent to which the repayment of the current liabilities can be guaranteed, which intuitively reflects the actual ability of the enterprise to repay the current liabilities.

Generally, this indicator is greater than 1, indicating that the repayment of the company's current liabilities is reliably guaranteed. The larger the index, the more net cash flow generated by the company's operating activities, the more it can ensure that the enterprise repays the debt to the guess period on time, but it is not the bigger the better, and the indicator is too large to indicate that the company's liquidity is not fully utilized and the profitability is not strong.

The cash-flow-liability ratio is the ratio of the net operating cash flow to the current liabilities of an enterprise in a certain period, which can reflect the ability of the enterprise to repay short-term liabilities in the current period from the perspective of cash flow. The calculation formula is: cash flow liabilities round caution ratio = annual net operating cash flow 100% of current liabilities at the end of the year.

The analysis of the cash-to-debt ratio examines the actual solvency of an enterprise from the perspective of the dynamics of cash inflows and outflows, reflecting the net cash flow generated by operating activities in the current period to offset the multiple of current liabilities.