Price to Cash-flow

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Company  P/CF  Country Industry
Versum Materials9.70USABasic Materials
Samsung Biologics-38.40KoreaHealth Care
Quality Care Property2.10USAFinancials
Nishi-Nippon Financi3.60JapanFinancials
Liberty Expedia Holding63.00USAConsumer Services
Lamb Weston Holdings12.70USAConsumer Goods
Kyushu Railway7.50JapanIndustrials
Innogy SE6.70GermanyUtilities
Arconic5.30USABasic Materials
AGNC Investment4.30USAFinancials
AdvanSix5.60USABasic Materials
Adient plc12.70USAConsumer Goods
Grupo Aeroportuario del Centro Norte20.90MexicoIndustrials
Grupo Aeroportuario del Pacifico20.80MexicoIndustrials
Uniper SE2.90GermanyUtilities

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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