The operating-cash-flow-to-capital-expenditures ratio in excess of 1.0 means that the firms' current operating activities are providing cash in excess of the amount needed to fund its desired investment in plant and intangible assets.

Question

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This ratio measures the ability of the company to fund its capital expenditures from its operating cash flow. A ratio greater than 1.0 indicates that the company generates more cash from its operations than is needed for investments in plant, property, and equipment, thus having excess cash for other uses.

The Operating-Cash-Flow-To-Capital-Expenditures Ratio in Excess of 1