Free Cash Flow / DebtView Financial Glossary Index
Free Cash Flow to Debt is a ratio that shows the fraction of all debt that would be repaid in one year if all of the free cash flow went to repaying debt. It allows investors to see the company’s financial stability.
If the ratio is high, then the company can repay its debt more easily and can incur more debt than companies that have lower ratios.
Free Cash Flow / Average Total Debt
Note: See Free Cash Flow for its calculation