PRICE TO CASH-FLOW

Price to Cash-flow




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Company  P/CF  Country Industry
Idexx Labs41.40USAHealth Care
Coty27.10USAConsumer Goods
Advanced Micro Devices (AMD)0.00USATechnology
RPC Group21.20UKIndustrials
Melrose Industries78.90UKIndustrials
China Life Insurance0.70TaiwanFinancials
Temenos Group23.60SwitzerlandTechnology
SEB C3.20SwedenFinancials
Merlin Properties Socimi SA-60.40SpainFinancials
Rockcastle Global Real Estate Co24.10South AfricaFinancials
Rand Merchant Investment Hold.15.80South AfricaFinancials
Famous Brands32.30South AfricaConsumer Services
Mosenergo3.30RussiaUtilities
Mechel9.20RussiaBasic Materials
Jastrzebska Spolka Weglowa8.70PolandBasic Materials
Metro Pacific Investments12.40PhilippinesUtilities

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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