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The operating cash flow ratio, calculated by dividing operating cash flow by current liabilities, measures a company's ability to cover its short - term liabilities
The operating cash flow ratio, calculated by dividing operating cash flow by current liabilities, measures a company's ability to cover its shortterm liabilities with cash generated from operations. A higher ratio indicates strong liquidity and financial health, suggesting the company can easily meet its shortterm obligations. This ratio is important for stakeholders to evaluate the company's cash flow management and operational efficiency, providing insights into its financial stability and sustainability.
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