cash flow to long-term debt ratio - Investment & Finance Definition
A cash flow coverage ratio that measures how much cash is available to pay for long-term debt. This ratio is a good indicator of potential bankruptcy. To arrive at the ratio, compute cash flow by adding net income, depreciation expense, and changes in deferred tax, then dividing that amount by the book value of long-term debt.Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.