Cash Flow Coverage Ratio

Formula to calculate cash flow coverage ratio: Cash Flow Coverage Ratio = net income + depreciation and amortization/total debt payments. Cash flow coverage ratio definition and explanation: The cash flow coverage ratio indicates the ability to make interest and principal

Times Interest Earned Ratio

Formula to calculate times interest earned: Times Interest Earned Ratio = (net income + interest) / interest. Times interest earned definition and explanation: The times interest earned ratio indicates the extent of which earnings are available to meet interest payments.

Bad Debts Ratio

Formula to calculate bad debts ratio: Bad Debts Ratio = bad debts / accounts receivable. Bad debts ratio definition and explanation: The bad debts ratio is an overall measure of the possibility of the business incurring bad debts. The higher

Average Inventory Period Ratio

Formula to calculate average inventory period: Average Inventory Period = (inventory x 365 days) / cost of sales. Average inventory period definition and explanation: The average inventory period is also referred to as Days Inventory and Inventory Holding Period. This