The Cash Flow Coverage Ratio measures _________.1 pointhow well a company can pay its expensescompany solvencyhow well a company converts sales to casha company’s ability to pay its short-term obligations13.Question 13The cash flow margin ratio demonstrates _________.1 pointcompany solvencyhow well a company converts sales to casha company’s ability to pay its short-term obligations how well a company produces cash from its total revenue
Question
The Cash Flow Coverage Ratio measures _________.1 pointhow well a company can pay its expensescompany solvencyhow well a company converts sales to casha company’s ability to pay its short-term obligations13.Question 13The cash flow margin ratio demonstrates _________.1 pointcompany solvencyhow well a company converts sales to casha company’s ability to pay its short-term obligations how well a company produces cash from its total revenue
Solution
The Cash Flow Coverage Ratio measures a company’s ability to pay its short-term obligations. This ratio is used to determine the company's financial health and its ability to cover its expenses and debts within a short period of time.
The cash flow margin ratio, on the other hand, demonstrates how well a company produces cash from its total revenue. This ratio is a measure of a company's operational efficiency and its ability to convert sales into cash. It shows how much cash a company generates for each dollar of sales.
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