# Price To Cash Flow Ratio Calculator

Introduction

Calculating the price-to-cash-flow (P/CF) ratio is crucial for investors to assess a company’s financial health and valuation. This ratio compares a company’s market price per share to its operating cash flow per share. In this article, we’ll provide a handy calculator to simplify this calculation process.

## How to Use

Enter the required values in the respective fields of the calculator below and click on the “Calculate” button to obtain the price-to-cash-flow ratio.

## Formula

The formula for calculating the price-to-cash-flow (P/CF) ratio is:

## Example Solve

Let’s consider a hypothetical company with a market price per share of $50 and an operating cash flow per share of $5.

**FAQs**

**Q: What does the price-to-cash-flow ratio indicate?****A: **The price-to-cash-flow ratio provides insights into how much investors are willing to pay for a company’s cash flow.

**Q: How does the P/CF ratio differ from other valuation metrics?****A: **While the price-to-earnings (P/E) ratio focuses on earnings, the P/CF ratio emphasizes cash flow, which can offer a clearer picture of a company’s financial health.

**Q: Is a higher or lower P/CF ratio preferable?****A:** A lower P/CF ratio suggests that the company may be undervalued, while a higher ratio could indicate overvaluation.

## Conclusion

The price-to-cash-flow (P/CF) ratio is a valuable tool for investors to assess a company’s valuation and financial performance. By utilizing the calculator provided below, investors can make informed decisions regarding their investments.