Cash flows from operating activities divided by (repayments of long-term borrowings + assets acquired + dividends paid) is the formula for:
A) cash flow adequacy ratio.
B) repayment of long-term borrowing ratio.
C) debt coverage ratio.
D) operations index.

Question

Quizplus · Accepted Answer

The formula given is for cash flow adequacy ratio, which is a measure of a company's ability to generate enough cash flow to cover its debt servicing obligations and other investing or financing activities.

Cash Flows from Operating Activities Divided by (Repayments of Long-Term