Accounting / July 9, 2018 / Justice Buckley
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.
Debt financing can include borrowing from banks, business credit cards, lines of credit, personal loans, merchant cash advances, and invoice financing. This method creates a debt that must be repaid but lets you maintain sole control of your business.
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