Price to Cash-flow

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Company  P/CF  Country Industry
United Development C8.90QatarFinancials
Ezdan Holding22.30QatarFinancials
Barwa Real Estate Co4.30QatarFinancials
Bangkok Expressway a40.00ThailandIndustrials
Ariake Japan19.80JapanConsumer Goods
Albemarle26.70USABasic Materials
Al Meera Consumer Go21.20QatarConsumer Goods
Ain Pharmaciez10.20JapanConsumer Services
Adastria Holdings5.10JapanConsumer Services
Aamal Co. Q.S.C.12.10QatarFinancials
Dell Technologies4.80USATechnology
Qinqin Foodstuffs Gr10.40ChinaConsumer Goods
Poste Italiane3.10ItalyFinancials

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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