Price to Cash-flow

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Company  P/CF  Country Industry
S&P Global0.00USAFinancials
Moneta Money Bank6.20Czeck RepublicFinancials
CCR SA11.50BrazilIndustrials
Megacable Holdings S16.70MexicoConsumer Services
Ingevity16.90USABasic Materials
Fibria Celulose S.A.8.40BrazilBasic Materials
Enersis Americas SA3.00ChileUtilities
Concordia Financial12.30JapanFinancials
ENDESA Americas0.00ChileUtilities
BidCorp Ltd0.00South AfricaIndustrials
El Puerto de Liverpool SAB32.70MexicoConsumer Services
3SBio (P Chip)34.90ChinaHealth Care
Coca-Cola European Partners9.40USAConsumer 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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