Price to Cash-flow

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Company  P/CF  Country Industry
Bioverativ0.00USAHealth Care
BOC Aviation3.80Hong-KongIndustrials
Orient Securities (H-0.50ChinaFinancials
Varex Imaging17.50USAHealth Care
Hilton Grand Vacations22.50USAConsumer Services
Park Hotels & Resort9.70USAFinancials
China International Capital-2.30ChinaFinancials
Yum China Holdings11.30USAConsumer Services
Versum Materials13.00USABasic Materials
Samsung Biologics-41.00KoreaHealth Care
Quality Care Property2.60USAFinancials
Nishi-Nippon Financi4.10JapanFinancials
Liberty Expedia Holding62.00USAConsumer Services
Lamb Weston Holdings14.90USAConsumer Goods
Kyushu Railway8.90JapanIndustrials

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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