Price to Cash-flow

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Company  P/CF  Country Industry
Fibria Celulose S.A.8.40BrazilBasic Materials
Enersis Americas SA3.00ChileUtilities
Concordia Financial12.30JapanFinancials
ENDESA Americas0.00ChileUtilities
BidCorp Ltd0.00South AfricaIndustrials
El Puerto de Liverpool SAB32.70MexicoConsumer Services
3SBio (P Chip)34.90ChinaHealth Care
Coca-Cola European Partners9.40USAConsumer Goods
Banco Popular Esp4.10SpainFinancials
Vuela Compania De Av10.40MexicoConsumer Services
Alpek SAB8.00MexicoBasic Materials
Grupo Aeromexico5.80MexicoConsumer Services
Kingston Financial G-12.30Hong-KongConsumer Services
Domino's Pizza Enter56.90AustraliaConsumer Services
Broadcom Limited26.50USATechnology

Price/cash-flow ratio (P/CF) is a term used in financial analysis. It is a liquidity-oriented equity ratio that reflects the ratio of stock price to cash flow per share. It requires an additional indication of what kind of cash flow (for example, gross cash flow, operating cash flow or free cash flow) is meant. In our case, Cash-flow is calculated by adding depreciations, amortizations and other non-cash items to earnings (net profits) of the year, this is call indirect method.

The P/CF can be used in addition to or in place of price-earnings ratio. The Price to Cash-flow is less susceptible to accounting technical manipulations than price to earnings ratio, because the cash flow is not affected by accounting policy measures such as eliminating of hiding expenses, modifying revenues or depreciations accounting or by alteration of payment periods.

Price to Cash-flow

For companies that determine their profit according to different accounting rules (comparison of companies from different countries), the P/CF can provide a better ratio than P/E.

However, cash-flows are due to investment and ratios suffer considerably stronger fluctuations than those calculated over earnings. It is therefore not appropriate to evaluate the result of a single financial year, but must be considered and averaged over several years.

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