Operating Cash Flows to Total Liabilities Ratio

The Operating Cash Flow to Total Liability Ratio calculator compute the ratio (%) of cash flow to total liability.

INSTRUCTIONS: Choose the currency units of choice and enter the following:

• (ocf) This is the Operating Cash Flow.
• (tl) This is the Total Liability.

Operational Cash-flow Ratio (OCR): The calculator returns the ratio a percentage.

General Information

This coverage ratio compares a company's operating cash flow to its total debt, which, for purposes of this ratio, is defined as the sum of short-term borrowings, the current portion of long-term debt and long-term debt. This ratio provides an indication of a company's ability to cover total debt with its yearly cash flow from operations. The higher the percentage ratio, the better the company's ability to carry its total debt.

Resource:

• Dopson, Lea R., and David K. Hayes. Managerial Accounting for the Hospitality Industry. Hoboken, NJ: Wiley, 2009. Print.