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Intro to stocks

Cash Flow Ratios

Below are three commonly used ratios used to help investors analyze a company's cash flow. Cash flow measures a company's ability to continue to grow, without accessing potentially expensive outside capital or feeding upon itself through selling assets. Because it includes non-cash items such as depreciation and amortization, many view it as a more conservative and accurate indicator than earnings.

Price-to-Cash Flow

Current Share Price


Cash Flow Per Share Over the Last 4 Quarters*

* Cash Flow divided by the company's shares outstanding

Cash Flow Growth

Current Year Cash Flow - Last Year Cash Flow


Last Year Cash Flow

"20 per cent growth is often considered a benchmark, however, growth rates between industries range widely. Comparing an individual company to the industry average is often the best approach."

Debt-to-Cash Flow

Total Debt Outstanding


Cash Flow

Rule of Thumb:

Remember these are only benchmarks, each company should be evaluated on an individual basis.

Valuation Methods:


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