|Metro Pacific Investments||12.40||Philippines||Utilities|
|Aker BP ASA||6.20||Norway||Oil and Gas|
|Grupo Simec B||12.00||Mexico||Basic Materials|
|Mebuki Financial Group||27.30||Japan||Financials|
|Hitachi Kokusai Electric||22.50||Japan||Technology|
|PT Hanjaya Mandala Sampoerna||32.20||Indonesia||Consumer Goods|
|Matahari Department Store||15.30||Indonesia||Consumer Services|
|ICICI Prudential Life Insurance||7.00||India||Financials|
|Dassault Aviation S.A.||8.90||France||Industrials|
|Postal Savings Bank of China||8.60||China||Financials|
|Livzon Pharmaceutical Group||15.90||China||Health Care|
|Everbright Securities (H)||9.10||China||Financials|
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.
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.
All rights reserved
Part of Enciclopedia Financiera Group
Disclaimer: Information on this site is only for informational purposes. Always consult a professional advisor before investing.