ratios showing the cash position or change in cash of the business. Higher levels of cash flow indicate improved cash earnings and liquidity. Earnings are of higher quality if they are backed up by cash because cash can be used to pay debt, purchase fixed assets, and so on. Some cash flow ratios are (1) cash flow from operations/ net income, (2) cash flow coverage equal to cash flow from operations/cash expenses, and (3) cash reinvestment ratio equal to cash used/cash obtained. A high cash reinvestment ratio indicates that more cash is being used in the business.