price/cash flow ratio

price/cash flow ratio definition - finance
The price of a stock divided by the expected cash flow per share. The cash flow per share is typically calculated using EBITDA (earnings before interest, taxes, depreciation, and amortization), but free cash flow and operating cash flow are also used. This relative valuation technique focuses on a companyÂ’s cash flow instead of earnings. Cash flow is typically less easily manipulated than earnings.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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