Cash Flow To Capital Expenditures - CF to CAPEX

Cash flow to capital expenditures is pretty much what it sounds like: a ratio between cash flow and capital expenditures. Cash flow is the money going in-and-out of a business, and capital expenditures are big-ticket purchases for the business, what those in-the-know might call “long-term assets.” The math is also what you’d expect:

Cash Flow to Capital Expenditures = Cash Flow / Capital Expenditures

The higher the ratio (higher cash flow compared to capital expenditures), the stronger a company looks in its ability to fund its own operations. There’s nothing that says ‘confidence’ like a company standing on its own two feet.