Debt repayment period

Debt repayment period is one of the indicators of indebtedness and financial structure. It shows in years, how long it is expected that the company will repay its loans and borrowings from operating cash flow.

This indicator is an inverted indicator of Solvency.

Calculation formula

Instead of operating cash flow may also be used total cash flow or profit.

Interpretation

The lower is the indicator, the better. The ideal values are about 3-5 years.