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What is Cash Flow Liquidity
Cash Flow Liquidity is a term that refers the enterprise's ability to repay its debts from generated cash funds.

Cash Flow Liquidity is a term that refers to the enterprise’s ability to repay its debts from generated cash funds. The indicator is derived from the liquidity ratios.

Calculation:

Cash Flow Liquidity = Operating cash flow / Current liabilities

The indicator belongs to indicators based on cash flow.

Use of the cash flow per share in practice: In the enterprise it is used by CFO in financial analysis to analyze ratios. Indicators based on cash flow try to catch warning signs of potential credit problems and assess internal financial potential of the company.

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Last update: 31.08.2015

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