Definition of 'Sales To Cash Flow Ratio'
A comparison of a company's sales to its cash flow. The sales to cash flow ratio is expressed on a per-share basis and is calculated by dividing sales per share by the cash flow per share:
Sales to Cash Flow Ratio =
Sales Per Share_____ Cost Flow Per Share
Higher ratios are more favorable and are indicative of positive financial strength within a company. The sales to cash flow ratio is an important metric for measuring financial strength, because it takes into consideration the company's output (sales) as the primary means of inbound cash flow.
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