Metrics & KPIsCurrent Maturities & Long Term Debt Coverage
Definition
This ratio expresses the coverage of current maturities by cash flow from operations. Because cash flow is the primary source of debt retirement, this ratio measures the ability of a client to service principle repayment and is an indicator of additional debt capacity. Although it is misleading to believe that all cash flow is available for debt service, the ratio is a valid measure of the ability to service long-term debt.
Tags
cash, cash flow, debt, capacity, payment, long term