Which of the following cash flow ratios is used to determine an entity’s solvency?Debt coverage ratio.Cash adequacy ratio.Free cash flow ratio.Cash flow ratio.

Question

Which of the following cash flow ratios is used to determine an entity’s solvency?Debt coverage ratio.Cash adequacy ratio.Free cash flow ratio.Cash flow ratio.
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Solution 1

The Debt Coverage Ratio is used to determine an entity's solvency.

The Debt Coverage Ratio, also known as the Debt Service Coverage Ratio, measures a company's ability to repay its debts by comparing its net operating income with its total debt service (the total amount of money required over a giv Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob

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Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
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