Not fully cash - includes accrued sales and expenses. Assumes no cash outflows for net working capital needs, capital expenditures or dividends. The amount of debt principal in relation to earnings available to repay debt after all operating and non-operating expenses except depreciation and amortization, interest and income taxes. A standard ratio. The result is the approximate number of periods required to repay debt principal.
Debt includes capital leases.
Not fully cash - includes accrued sales, income and expenses. The amount of earnings available to make interest, rent and preferred dividend payments after all operating and non-operating income and expenses except rent expense, interest and income taxes. A standard ratio. There are many variations. Use when rental expense or preferred dividends are material.