Capital Acquisition Ratio

g MAIN FOCUS : CAPITAL


g DFINITION :

The capital acquisition ratio reflects the company's ability finance capital expenditures from internal sources.


g COMMENT :

A ratio of less than 1:1 (100 %) indicates that capital acquisitions are draining more cash from the business than it is generating.


g FORMULA :

(cash flow from operations - dividends)
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
cash paid for acquisitions