Formula to
calculate cash reinvestment ratio:
Cash Reinvestment
Ratio = increases in fixed assets and working capital /
(net income + depreciation).
Cash reinvestment
ratio definition and explanation:
This ratio indicates the degree to
which net income is absorbed (reinvested) in the
business.
A cash reinvestment ratio of greater
than 1:1 (100%) indicates that more cash is being use4d
in the business than being obtained.
The cash reinvestment ratio is included in many of
the financial statement ratio analysis spreadsheets
highlighted in the left column, which provide
formulas, definitions, calculation, charts and
explanations of each ratio.
The cash reinvestment ratio is listed in our efficiency
ratios.
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Spreadsheets to
calculate ratios (includes formulas, definitions,
explanations and charts):
See list
of ratios , or the financial statement ratio
analysis spreadsheets which are not highlighted in the
left column, to see which other ratios our spreadsheets
calculate, define and explain.
The cash reinvestment ratio
may be included in our
custom 1, 3 or 5 period financial
statement ratio analysis spreadsheet.
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