A ratio above 1 means the company could repay all its debt from one year of cash flow. Analysts sometimes use free cash flow (after capital expenditure) for a stricter test.
How to use the Cash Flow to Debt Ratio Calculator
- Operating cash flow
- Capital expenditure
- Total debt
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter operating cash flow, capital expenditure and total debt.
Inputs explained
| Field | What to enter |
|---|---|
| Operating cash flow | Amount in your currency |
| Capital expenditure | Amount in your currency |
| Total debt | Amount in your currency |
What each result means
- Cash flow to debt ratio = [Operating cash flow]÷[Total debt]
- Free cash flow to debt ratio = ([Operating cash flow] – [Capital expenditure])÷[Total debt]
- Years to repay debt from operating cash flow = [Total debt]÷[Operating cash flow]
Example values
How the main result changes when Operating cash flow changes and everything else stays at the example values above:
| Operating cash flow | Cash flow to debt ratio |
|---|---|
| 225,000 | 0.188 |
| 337,500 | 0.281 |
| 450,000 | 0.375 |
| 562,500 | 0.469 |
| 675,000 | 0.563 |
| 900,000 | 0.75 |
Formula
Cash flow to debt = operating cash flow ÷ total debt
Years to repay = total debt ÷ cash flow
Worked example
Inputs: Operating cash flow: $450,000; Capital expenditure: $150,000; Total debt: $1,200,000.
Results: Cash flow to debt ratio = 0.375; Free cash flow to debt ratio = 0.25; Years to repay debt from operating cash flow = 2.7.
Frequently asked questions
What is a good cash flow to debt ratio?
Above 0.25–0.3 is often considered healthy; above 1 is very strong.
Should I use operating or free cash flow?
Free cash flow is stricter because it subtracts capital spending.
Why does this ratio matter?
It shows the company's ability to service debt from operations.