Operating cash flow interest coverage ratio
factor.formula
in:
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The net cash flow from operating activities in the last 12 months (Trailing Twelve Months, TTM) represents the net amount of actual cash inflow minus outflow generated by the company in its daily operating activities. This indicator directly reflects the cash flow of the company's main business.
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The interest expense for the last 12 months (Trailing Twelve Months, TTM) usually refers to the total interest expenses incurred by the company due to financing activities such as borrowing and bonds, minus interest income. This expense reflects the financing cost pressure of the company.
factor.explanation
The operating cash flow interest coverage ratio measures the ability of the cash flow generated by the company's operating activities to cover interest expenses, and is an important indicator for measuring the company's debt repayment ability. A ratio greater than 0 indicates that the company's operating cash flow can cover interest expenses; the higher the ratio, the less pressure the company has to pay interest expenses and the stronger its debt repayment ability. This indicator focuses on analyzing whether the cash flow generated by the company's own operating activities is sufficient to pay debt interest, and is a key indicator for analyzing the company's long-term stable operation and financial health. It should be noted that this indicator does not reflect the company's ability to repay the principal of the debt. The ability to repay the principal usually needs to be comprehensively evaluated in combination with other financial indicators, such as the debt-to-asset ratio and the operating cash flow debt repayment ratio.