What does Cash Flow Cover indicate?

Cash Flow Cover is an important financial metric that reflects a company's ability to meet its short-term obligations using its operating cash flow. By measuring how well current cash flows can satisfy current liabilities, this metric provides valuable insights into the liquidity position of the business. A strong cash flow cover indicates that the business generates sufficient cash to pay off its debts as they come due, which is crucial for maintaining solvency and financial health.

The other options address different aspects of financial management and performance. For instance, the average time to convert stock into sales relates to inventory management efficiency, the average days to collect from debtors focuses on receivables management, and the average days to pay creditors looks at cash outflows and vendor relationships. Each of these metrics serves a different purpose, but they do not specifically measure a company's immediate capability to cover its liabilities with cash generated from operations as Cash Flow Cover does.