The cash current debt coverage ratio may be a better indicator of liquidity than the current ratio.

Question

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The cash current debt coverage ratio takes into account the company's ability to generate cash from operations to cover its debt obligations in the short term, whereas the current ratio only measures the company's short-term assets to short-term liabilities. Therefore, the cash current debt coverage ratio provides a more comprehensive understanding of a company's liquidity position.

The Cash Current Debt Coverage Ratio May Be a Better