Price to Cash-flow

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Company  P/CF  Country Industry
ADNOC Distribution PJSC8.30U. Arab EmiratesOil and Gas
Delphi Technologies PLC8.80USAConsumer Goods
Emaar Development PJSC0.00U. Arab EmiratesFinancials
Arjo B7.20SwedenHealth Care
Dino Polska SA28.40PolandConsumer Services
BGF Retail0.00KoreaConsumer Services
SG Holdings16.20JapanIndustrials
Foxconn Interconnect Tech0.00Hong-KongIndustrials
Delivery Hero AG-59.30GermanyConsumer Services
Ald SA-4.40FranceIndustrials
WuXi Biologics (P Chip)0.00ChinaHealth Care
Guotai Junan Securities (H)-0.30ChinaFinancials
Petrobras Distribuidora SA34.00BrazilOil and Gas
IRB Brasil Resseguros70.00BrazilFinancials
Azul S.A.0.00BrazilConsumer Services

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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