Operating Cash Flow to Average Current Liabilities Ratio
factor.formula
Operating cash flow/average current liabilities ratio:
Average current liabilities:
in:
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The net cash flow from operating activities for the rolling 12 months (Trailing Twelve Months). This indicator reflects the actual cash inflow generated by the company's core business in the past year and is an important indicator for measuring the company's operating quality and profitability.
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Average current liabilities represent the average short-term debt level of an enterprise during the reporting period. This value is calculated by averaging the current liabilities at the beginning and end of the period, and can more accurately reflect the short-term debt pressure of an enterprise during the reporting period.
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Opening current liabilities refer to the total amount of debts that an enterprise needs to repay within an accounting cycle (usually one year or one quarter) at the beginning of the reporting period (usually the beginning of the year or the beginning of the quarter). It includes accounts payable, notes payable, short-term loans, etc.
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Current liabilities at the end of the period refer to the total amount of debts that a company needs to repay within an accounting cycle at the end of the reporting period (usually the end of the year or the end of the quarter), including accounts payable, notes payable, short-term loans, etc.
factor.explanation
The operating cash flow/average current liabilities ratio is an important indicator to measure a company's short-term debt repayment ability. The higher the ratio, the more cash inflow the company generates from its operating activities, the stronger its debt repayment ability is compared to its short-term debt, and the lower its financial risk is. On the contrary, a low ratio may indicate that the company has greater short-term debt repayment pressure and its financial situation may be potentially risky. This indicator can help investors assess the financial health and operating efficiency of a company and conduct comparative analysis with other companies in the same industry. This ratio is particularly important for companies that rely on short-term debt to maintain operations, as it can effectively assess the company's debt repayment ability and operating risks.