Cash Flow Adequacy Calculator

The Cash Flow Adequacy measures how well the company can cover the annual payments of all the long-term annual debt with the cash flow from its operating activities.

If Cash Flow Adequacy increases over time:

An increasing Cash Flow Adequacy can indicate a company is more likely to cover its long-term debt using its cash flow from operations.

If Cash Flow Adequacy decreases over time:

A decreasing Cash Flow Adequacy can indicate a company is less likely to cover its long-term debt using its cash flow from operations.

If Cash Flow Adequacy stays the same over time:

An unchanged Cash Flow Adequacy usually indicates the ability of the company to cover its long-term debt using its cash flow from operations has remained the same.