My understanding is that the cash coverage ratio is one of the ratios that tests whether a company can comfortably honor its debts (on time).
I read that cash coverage ratio = (EBIT + Depreciation) / (annual interest expense), meaning that you look exclusively at the income statement, right?
Is this supposed to be thematically and numerically identical to (cash holdings shown on balance sheet) / (annual interest expense)?
What about (cash holdings shown on balance sheet + accounts receivables ) / (annual interest expense)?