The cash flow adequacy ratio is defined as:
$\frac{\text {Total Cash Flow - Capital Expenditures }}{\text { Average Debt Maturing over Next Five Years}}$

Question

The cash flow adequacy ratio is defined as:
 $\frac{\text {Total Cash Flow - Capital Expenditures  }}{\text { Average Debt Maturing over Next Five Years}}$

Quizplus · Accepted Answer

The cash flow adequacy ratio is typically defined as operating cash flows divided by total debt maturities (including both principal and interest) over a certain period, often one year, not as described in the question.