CAPEX + dividends coverage ratio definition


CAPEX + dividends coverage ratio shows company’s usage of funds (from operating cash flow) for the purpose of investing (within the company) and dividend payouts. Data to calculate this ratio is collected from balance sheet, stock market bulletin and cash flow statement.

Norms and limitations

There are no general norms for this ratio.

It is recommended to compare this ratio to those of the companies, working within the same industry.


Operating cash flow (OCF, cash flow from operations) is the money that a company earns from its’ core business.

Capital expenditures or CAPEX are the expenses, paid for purchased capital asset or for made investments.

Dividend is a part of company’s net income, paid to the company’s shareholders. Dividends are usually paid out in a form of cash, but may be expressed in other forms, such as stock and property.

Calculating this ratio dividends are uses only in cash form.