What are the key financial ratios to analyze the cash flow of an entity?



Q6. List of cash flow ratios
What are the key financial ratios to analyze the cash flow of an entity?

A6.
Cash flow ratios are calculated as follows:
(1) Cash flow return on assets (Cash flow ROA)
= Cash flows from operating activities / Average total assets
(2) Current debt to cash flow ratio
= Current liabilities / Cash flows from operating activities
(3) Debt to cash flow ratio
= Total liabilities / Cash flows from operating activities
(4) Free cash flow
= Cash flows from operating activities – Capital expenditures – Cash dividends

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