Which of the following measures can be used to evaluate a company's ability to meet future debt obligations after paying operating expenses and dividends and making capital expenditures?

Question

Quizplus · Accepted Answer

Cash flow adequacy ratio measures a company's ability to meet future debt obligations after paying operating expenses and dividends and making capital expenditures. It evaluates the cash flow of the company to assess whether it can cover its obligations. Earnings per share and net income do not take into account capital expenditures and changes in cash flow, while the net increase or decrease in cash and cash equivalents only measures the change in cash and does not evaluate the ability to meet future debt obligations.

Which of the Following Measures Can Be Used to Evaluate