Cash Flow Coverage Ratio Formula used by the investors, creditors and other stockholders to find a broad overview of the financial operating efficiency of the company. Cash flow coverage ratio formula calculated by dividing the operating cash flow to the total debt of the company.
Cash Flow Coverage Ratio = Operating Cash Flow/ Total Debt
there is another way to calculate the Cash Flow Coverage Ratio Formula in which you need the add the depreciation and amortization in the EBIT first and divide it by the total debt.
Cash Flow Coverage Ratio = (EBIT + Depreciation + Amortization)/Total Debt
You can also learn about the definition of Cash flow Coverage ratio.
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