Operating cash flow current liabilities coverage ratio
factor.formula
Operating cash flow current liabilities coverage ratio:
Average current liabilities:
in:
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Refers to the net cash inflow actually obtained by the company through operating activities in the past 12 consecutive months (rolling calculation). This value excludes the impact of non-operating factors and can more accurately reflect the cash generation capacity of the company's main business. TTM (Trailing Twelve Months) refers to the data of rolling 12 months, which can better reflect the company's recent operating conditions.
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Refers to the arithmetic average of the total current liabilities of an enterprise at the beginning and end of the reporting period. This value represents the average short-term debt pressure borne by the enterprise during the reporting period. Using the average value can smooth out short-term fluctuations caused by seasonality or special events, thereby more objectively reflecting the overall short-term debt level of the enterprise.
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Refers to the total amount of current liabilities of an enterprise at the beginning of the accounting reporting period (usually a quarter or year). Current liabilities are debts that are expected to be repaid within one year or a normal operating cycle, such as accounts payable and short-term loans.
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Refers to the total amount of current liabilities of a company at the end of the accounting reporting period (usually a quarter or year).
factor.explanation
The operating cash flow to current liabilities coverage ratio reflects the ability of an enterprise to repay short-term debts using cash flows generated from operating activities. The higher the ratio, the more cash the enterprise has to cover its current liabilities and the lower the short-term debt repayment risk. This indicator can be used to assess the financial health of an enterprise and the stability of its short-term operations, and is of great significance in financial analysis and risk management. Unlike traditional solvency indicators that only consider static data on the balance sheet, this ratio focuses more on the actual cash generation capacity of an enterprise and can more effectively predict the short-term financial risks of an enterprise. This ratio is an important indicator for measuring a company's financial flexibility, operating efficiency and solvency, and is also one of the financial indicators that need to be focused on when conducting fundamental quantitative analysis.