CAPEX Dividend Coverage Ratio

Calculate the dividend paid and capital expenditure coverage ratio, a solvency ratio that measures a company’s ability to cover both its capital expenditures and dividend payments with its cash flow from operations.

The capex dividend coverage ratio assesses whether a company’s cash flow from operations is sufficient to cover both its capital expenditures (which are essential for maintaining and growing its business) and its dividend payments to shareholders. A higher ratio indicates a stronger ability to fund both capex and dividends from operating cash flow.

The formula is as follows:

Also known as: capex dividend coverage.

CAPEX Dividend Coverage Ratio in Python

get_capex_dividend_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_dividend_coverage_ratio as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

capex_dividend_coverage_ratios = toolkit.ratios.get_capex_dividend_coverage_ratio()

Which returns:

Parameters

get_capex_dividend_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.

Related Solvency Ratios