Price-to-Cash Flow Ratio

(redirected from Price to cash flow)
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Price-to-Cash Flow Ratio

The ratio of a company's stock price to the quantity of its cash inflows, minus its cash outflows over a given time, usually a year. The price-to-cash flow is similar to a company's price-earnings ratio, but it does not take into account earnings that have not actually been received. Some analysts prefer the price-to-cash flow ratio because it allows them to assess risk relative to the company's cash on-hand, instead of the cash it ought to have.
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However, the Price to Cash Flow, or P/CF, is another great ratio to do just that.
Many analysts prefer using the Price to Cash Flow metric to judge a stock's value.
And just like the P/E ratio is calculated by dividing the Price by its Earnings per share -- the Price to Cash Flow ratio is calculated by dividing the Price by its Cash Flow per share.
However, the Price to Cash Flow (P/CF) is another great ratio to do just that.
And just as the P/E ratio is calculated by dividing Price by its Earnings per share -- the Price to Cash Flow ratio is calculated by dividing Price by Cash Flow per share.
Price to Cash Flow less than or equal to Median for its Industry (Want to see Companies with valuations lower than the median for their respective groups.
We have a preference for companies with below average price/earnings ratios, below average price to cash flow ratios, below average PEG ratios (that's price/earnings to growth rate) for their sectors, but not necessarily deep value.
When I'm looking in the tech sector, I'm not going to be looking at things like price to book, but I will look at price to cash flow and a PEG ratio, or an earnings surprise (that's always a good indicator).