Question: What are analysts trying to evaluate when analyzing a cash flow adequacy ratio? Cash flow adequacy ratios are used to evaluate how well a company

What are analysts trying to evaluate when analyzing a cash flow adequacy ratio?

Cash flow adequacy ratios are used to evaluate how well a company can cover payments to suppliers and other operating activities of the firm.

Cash flow adequacy ratios are used to evaluate how well a company can cover annual payments of items such as debt, capital expenditures, and dividends from operating cash flow.

Cash flow adequacy ratios are used to evaluate how well a company can generate profits to cover all operating, investing and financing activities.

Cash flow adequacy ratios are used to evaluate how well a company can cover interest expense, lease payments and other fixed charges with cash from operations.

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