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Accounting / July 19, 2018 / Pearl Bailey

This can be calculated as total sales (income) less the costs (expenses) directly related to those sales. Raw materials, manufacturing expenses, labor costs, marketing, and transportation of goods are all included in expenses.

Debit to cash flow ratio - more simply known as debt ratio - is a comparison of a company's operating cash flow to it's overall debt. The purpose of this ratio is to estimate a company's ability to cover total debt with its annual cash flow from operations.

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