Cash flow excludes non-cash items such as depreciation, so P/CF is useful for capital-intensive companies whose earnings are depressed by large depreciation charges. A P/CF under 10 is often considered good value.
How to use the Price to Cash Flow Ratio Calculator
- Operating cash flow
- Shares outstanding
- Price per share
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter operating cash flow, shares outstanding and the share price.
Tips
- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.
Common mistakes to avoid
- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.
Inputs explained
| Field | What to enter |
|---|---|
| Operating cash flow | Amount in your currency |
| Shares outstanding | A number |
| Price per share | Amount in your currency |
What each result means
- Cash flow per share = [Operating cash flow]÷[Shares outstanding]
- Price to cash flow ratio = [Price per share]÷[Cash flow per share]
Example values
How the main result changes when Operating cash flow changes and everything else stays at the example values above:
| Operating cash flow | Price to cash flow ratio |
|---|---|
| 225,000,000 | 16.89 |
| 337,500,000 | 11.26 |
| 450,000,000 | 8.44 |
| 562,500,000 | 6.76 |
| 675,000,000 | 5.63 |
| 900,000,000 | 4.22 |
Formula
Cash flow per share = operating cash flow ÷ shares outstandingP/CF = share price ÷ cash flow per shareWorked example
Inputs — Operating cash flow: $450,000,000; Shares outstanding: 100,000,000; Price per share: $38.
Results — Cash flow per share = $4.50; Price to cash flow ratio = 8.44.
Frequently asked questions
What is a good P/CF ratio?
Below about 10 is often seen as attractive.
Which cash flow should I use?
Operating cash flow, or free cash flow for a stricter test.
Why use P/CF instead of P/E?
Cash flow is harder to manipulate with accounting choices.
What formula does the Price to Cash Flow Ratio Calculator use?
Cash flow per share = operating cash flow ÷ shares outstanding.