Cash Sufficiency Ratio Definitions

Question 1

Cash flow adequacy

Answer 1

Ability to cover its main cash requirements

Question 2

Repayment of long-term borrowings

Answer 2

Ability to cover its long-term debt out of cash from operating activities

Question 3

Dividend payment

Answer 3

Ability to cover its dividend payments

Question 4

Reinvestment

Answer 4

Ability to pay for its non-current assets out of cash from its operating activities

Question 5

Debt coverage

Answer 5

The payback period for coverage of long-term debt