Price-To-Cash-Flow Ratio
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Definition of 'Price-To-Cash-Flow Ratio'A measure of the market's expectations of a firm's future financial health. Because this measure deals with cash flow, the effects of depreciation and other non-cash factors are removed. Similar to the price-earnings ratio, this measures provides an indication of relative value.Calculated by:  |
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Investopedia explains 'Price-To-Cash-Flow Ratio'Because accounting laws on depreciation vary across jurisdictions, the price-to-cash-flow ratio can allow investors to assess foreign companies from the same industry (ex. mining industry) with a bit more ease. |
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