Equity Valuation

Price-to-Cash-Flow Ratio

Definition

What is Price-to-Cash-Flow Ratio?

Share price or market value divided by cash flow per share or total cash flow.

Example in practice

Analysts use cash flow when accounting earnings contain large non-cash items.

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Net income attributable to ordinary shareholders divided by weighted average ordinary shares.

Earnings per share assuming potentially dilutive securities convert into ordinary shares.

Earnings per share calculated using actual weighted average ordinary shares outstanding.

Cash generated or used by a company's core operations.

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