What do you mean by cash flow ratios, Financial Management

Assignment Help:

Q. What do you mean by Cash Flow Ratios?

Cash Flow Ratios: - Cash Flow Ratios are an additional device of cash management. Some important cash flow ratios are:

(i) Cash Turnover Ratio:-

Cash Turnover Ratio = Sales Per Period / Cash Balance

Higher cash turnover ratio point out that a given level of sales and cash balance requirement is less.

(ii) Cash Coverage Ratio:-

Cash Coverage Ratio = Annual Cash Flow before Interest and Taxes/ (Interest + Principal Payments (1/1-tax rate))

Higher the cash exposure ratio higher will be the credit worthiness of the firm for the reason that the lender' risk will be lower in such a case.

(iii)Cash to average Daily Purchase Ratio:-

Cash to Average Daily Purchase Ratio = Cash Balance /Average Daily Purchase

Average Daily Purchase = Purchases during the period/ Days during the period

(iv) Days of Cash Available:

Days of Cash Available = Average Cash Balance/Average Daily Outflows

(v) Cash Break-Even Point:

Cash Break-Even Point = Cash Fixed Costs/Contribution Per Unit

Contribution Per Unit = Selling price per unit - Variable Cost Per Unit.


Related Discussions:- What do you mean by cash flow ratios

Working capital cycle, Q. Working capital cycle? In a manufacturing con...

Q. Working capital cycle? In a manufacturing concern the working capital cycle is start with the purchase of the raw material and ends with the realization of the cash from the

Money market mutual fund, Money Market Mutual Fund Even as the Mutual F...

Money Market Mutual Fund Even as the Mutual Funds show a promise of becoming a major instrument of household savings, another concept which is being talked about and waiting to

What do you meant by yield, Q. What do you meant by Yield? Investment s...

Q. What do you meant by Yield? Investment should be in such securities which yield the highest return. However, safety should not be sacrificed at the expense of yield. How

Examine the concepts related to financial management, Assume you are a prof...

Assume you are a professional financial analyst working for a wealthy investor.  Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is

price of the bond be if it is downgraded, Andrew Industries is contemplati...

Andrew Industries is contemplating issuing a 30-year bond with a coupon rate of 7% (annual coupon payments) and a face value of $1000. Andrew believes it can get a rating of A from

Cvp, Info on applying CVP to product mix limiting factors

Info on applying CVP to product mix limiting factors

Show the motives of maintaining receivables, Q. Show the Motives of Maintai...

Q. Show the Motives of Maintaining Receivables? Motives of Maintaining Receivables :- (i) Sales Growth Motives: - The major objectives of credit sales are to increase the to

The safety margin, Norfolk Ltd is specialized in producing & selling air co...

Norfolk Ltd is specialized in producing & selling air conditions.  In 2010, the manufacturing cost per unit included:

Use of derivatives in equity portfolio management, Do you provide assignmen...

Do you provide assignment help on the topic Use of Derivatives in Equity Portfolio Management?

Calculate the weighted average cost, XYZ Energy Solutions plc (XYZ) has spe...

XYZ Energy Solutions plc (XYZ) has spent €12m designing and developing a new generation of domestic air source heat pumps. These new domestic heat pumps can easily be fitted to exi

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd