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6.Fixed-Charge Coverage Ratio - Cash Basis Formula 7.37 Fixed charge coverage ratio - cash basis = adjusted operating cash flow/fixed charges 7.Capital Expenditure Ratio Provides information on how much of the cash generated from operations will be left after payment of capital expenditure to service the company's debt. If the ratio is 2, it indicates that the company generates two times what it will need to reinvest in the business to keep operations going; the excess could be allocated to service the debt. Formula 7.38 Capital expenditure ratio = cash flow from operations capital expenditures 8.CFO to Debt Provides information on how much cash the company generates from operations that could be used to pay off the total debt. Total debt includes all interest-bearing debt, short and long term. Formula 7.39
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