Cash Flow Adequacy

The Cash Flow Adequacy calculator compoutes the Cash Flow Adequacy index which is used to help analyze a company. Bankers and other creditors are especially concerned with a company's ability to meet its principal and interest obligations. It measures the cash that a company has available to meet future debt obligations.

INSTRUCTIONS: Choose your preferred currency units and enter the following:

• (C) - Cash Flow from Operating Activities
• (CE) - Capital Expenditures
• (A) - Average Amount of Debt Maturing over Next Five Years

Cash Flow Adequacy: The calculator returns the unit-less index.

The Math

The formula for Cash Flow Addequatcy is as follows:

              CFA = `("Cash Flow from Operations" - "Capital Expenditures")/("Average Amount of Debt Maturing over the next five years")` .