![]() ![]() Here is a snapshot from the H1 2019 results of DHH International.ĭHH S.p.A – Extract from financial highlights for H1 2019 Example Calculation: Cash Conversion Ratio It must be noted that while EBITDA is pre-interest and taxes, operating cash flows are normally after interest and taxes, so a high level of interest and taxes would lower the ratio. This is because it is the closest to a company’s cash flows as it excludes non-cash expenses such as depreciation and amortization. Although other profit measures, such as EBIT or net income can be used to calculate CCR, EBITDA is the most widely used. Operating cash flows, also known as cash flow from operations, is a category in the cash flow statement and reflects the amount of cash a company has generated from its core operational activities during a specific period.ĮBITDA is the earnings before the effects of interest, taxes, depreciation, and amortization. ![]() The cash conversion ratio can be calculated using different cash flow and profit measures, but the most common approach is:Ĭash Conversion Ratio (CCR) = Operating cash flow / EBITDA
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