Accounting / July 19, 2018 / Sharon Hardin
The cash flow-to-debt ratio examines the ratio of cash flow to total debt. Analysts sometimes also examine the ratio of cash flow to just long-term debt. This ratio may provide a more favorable picture of a company's financial health if it has taken on significant short-term debt. In examining either of these ratios, it is important to remember that they vary widely across industries. A proper analysis should compare these ratios with those of other companies in the same industry.
The interest rate on a loan that is established in the beginning and does not change for the lifetime of the loan is said to be fixed. Loans with fixed interest rates are appealing to small business owners because the repayment amounts are consistent and easier to budget for in the future.
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