The cash debt coverage is computed by dividing net cash provided by operating activities by
A) average current liabilities.
B) net sales.
C) average long-term liabilities.
D) average total liabilities.

Question

Quizplus · Accepted Answer

The cash debt coverage ratio is calculated by dividing net cash provided by operating activities by average total liabilities, which measures a company's ability to repay its total liabilities from its operating cash flow.

The Cash Debt Coverage Is Computed by Dividing Net Cash