Price to Cash-flow

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Company  P/CF  Country Industry
Aveva Group70.90UKTechnology
ASE Industrial Holding0.00TaiwanTechnology
Deutsche Wohnen AG27.70GermanyFinancials
Ambu AS72.40DenmarkHealth Care
Boubyan Petrochemical12.80KuwaitBasic Materials
Abu Qir Fertilizers14.20EgyptBasic Materials
Abiomed Inc79.50USAHealth Care
a2 Milk32.90New ZealandConsumer Goods
51job ADR (N Shares)17.70ChinaIndustrials
Standard Life Aberdeen3.40UKFinancials
Brookfield Property2.40USAFinancials
China Tower (H)5.80ChinaTechnology
Keurig Dr Pepper34.80USAConsumer Goods
Veoneer0.00USAConsumer Goods
Pindu ADS (N Shares)0.00ChinaConsumer Services
Hyosung TNC0.00KoreaConsumer Goods

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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