Accounting / July 19, 2018 / Pearl Bailey
An income statement is a financial statement that reports a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities. It also shows the net profit or loss incurred over a specific accounting period.
The cash flow-to-debt ratio is the ratio of a company’s cash flow from operations to its total debt. This ratio is a type of coverage ratio, and can be used to determine how long it would take a company to repay its debt if it devoted all of its cash flow to debt repayment. Cash flow is used rather than earnings because cash flow provides a better estimate of a company’s ability to pay its obligations. The ratio is less frequently calculated using EBITDA or free cash flow.
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