Price-to-cash flow

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.

Price-to-cash flow.

You find a company's price-to-cash flow ratio by dividing the market price of its stock by its cash receipts minus its cash payments over a given period of time, such as a year.

Some institutional investors prefer price-to-cash flow over price-to-earnings as a gauge of a company's value.

They believe that by focusing on cash flow, they can better assess the risks that may result from the company's use of leverage, or borrowed money.

Mentioned in ?
References in periodicals archive ?
The MSCI World's price-to-sales, price-to-earnings and price-to-cash flow ratios remain at multi-year highs.
Stretched valuations, rate hikes to limit developed markets equity gains
Once you have filtered the list of candidates, you can further fine tune it by comparing each stock's price-to-book value ratio, price-to-cash flow ratio and price-to-sales ratio against industry and overall market average.
Are there still cheap stocks to buy now?
Price-to-cash flow and price-to-earnings ratios are good but not outstanding.
Shoppers Drug Mart IPO gets lukewarm reception
* AN INVESTOR WHO IS WILLING TO follow the value school of investing should consider eight factors in selecting securities (or mutual funds), including price-to-earnings ratio, price-to-cash flow ratio, price-to-book value ratio, dividend yield, private market value, adjusted net working capital, insider buying and stock repurchases.
Value investing

Financial browser ?
Full browser ?