CAPEX Coverage Ratio
Calculate the capital expenditure coverage ratio, a solvency ratio that measures a company’s ability to cover its capital expenditures with its cash flow from operations.
The capex coverage ratio evaluates a company’s ability to fund its capital expenditures, which are essential for maintaining and growing its business, using the cash generated from its operations. A higher ratio indicates a stronger ability to fund capital investments from operating cash flow.
The formula is as follows:
\[\text{Capital Expenditure Coverage Ratio} = \text{Cash Flow from Operations} / \text{Capital Expenditure}\]Also known as: capital expenditure coverage.
CAPEX Coverage Ratio in Python
get_capex_coverage_ratio is part of the Ratios module of the open-source Finance Toolkit. Install it with:
pip install financetoolkit -U
Then call get_capex_coverage_ratio as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")
capex_coverage_ratios = toolkit.ratios.get_capex_coverage_ratio()
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| AAPL | 9.3855 | 11.4075 | 10.087 | 12.5176 | 8.7678 |
| TSLA | 1.4346 | 2.053 | 1.4896 | 1.3157 | 1.7294 |
Parameters
get_capex_coverage_ratio accepts the following parameters:
- rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
- growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
- lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
- standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
- trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.