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What does capital-expenditure ratio mean?

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capital-expenditure ratio
Noun


The cash flow ratio that measures the relationship between a firm's cash-generating ability and its capital expenditures (CapEx), a ratio greater than 1 indicating the amount of cash the firm has left for debt after payment for capital expenditures: CFO ÷ CapEx.

Synonym(s): 
  • CapEx ratio; Capex ratio.
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