COVERAGE OF CURRENT MATURITIES
CONDITION
| Year : | 2006 |
| Your ratio : | 172.54 |
| Industry Avg : | 2.23 |
| Depreciation, : | $27,208 |
| Current Maturity Of Long-Term Debt : | $525 |
| Net Income : | $63,375 |
GRAPH
COVERAGE OF CURRENT MATURITIES
The Coverage of Current Maturities is the best indicator for repaying current obligation from the proceeds of your operations. If your company does not publish a free cash flow statement, this ratio is a shortcut method for quantifying your ability to take on additional debt in the future.
This ratio expresses the coverage of current maturities by cash flow from operations. Since cash flow is the primary source of debt retirement, this ratio measures the ability of a firm to service principal repayment and is an indicator of additional debt capacity. However, it is misleading to think that all cash flow is available for debt service. The ratio is valid measure of the ability to service long-term debt.
Your perfomance on this ratio indicates the ability to meet debt service over the next 12 months, if applicable.