|Price to cash flow (P/CF)|
Price to cash flow (P/CF)
Price-to-cash-flow ratio is a less-used fundamental valuation indicator. This valuation focuses on the amount of cash a company can pay to its shareholders in the form of a dividend.
To calculate price-to-cash-flow ratio, take the stock price and divide by the last reported yearly cash flow.
Price-to-cash-flow ratio is similar to that of P/E, and when using price-to-cash- flow ratio as a valuation tool, it is advisable to compare it only with companies in the same industry.