![]() The Apparel Category offers casual daily wear for infants, children, girls, boys, women and men, along with socks, intimate wear, disposable diapers, accessories and shoes. The Home products Category includes kitchen supplies, frames, craft supplies and bed & bath. The Seasonal Products Category consists of prepaid phones, electronics, toys, hardware, automotive gardening supplies, stationery and home office supplies. Unlike the price-to-earnings ratio (P/E), the P/CF ratio removes the impact of non-cash items such as depreciation & amortization (D&A), which makes the metric less prone to manipulation. The Consumables Category consists of cleaning products, health & beauty products, packaged food and pet supplies. The Price to Cash Flow Ratio (P/CF) evaluates the valuation of a company’s stock by comparing its share price to the amount of operating cash flow produced. It offers general merchandise under four categories - Consumables, Seasonal, Home products and Apparel. ![]() The company's merchandise comprises national brands from leading manufacturers, as well as own private brand selections with prices cheaper to national brands. The company offer a wider selection of merchandise, consumable items, seasonal items, home products and apparel. The industry average for this ratio is 2.75x, so the shares appear to be overpriced in relation to comparable companies.Dollar General Price to Free Cash Flow Ratio Historical Dataĭollar General Corporation is a discount retailers in the United States trading in low priced merchandise. The company is generating cash flows of $3 per share, so the price to cash flow ratio is 3.33x. The common stock of a business is currently being sold on a stock exchange for $10 per share. In both of these examples, investor expectations for future cash flows are driving the price of the stock, rather than the amount of current cash flows. However, since investors realize that the asset base of the company is gradually being destroyed, they may be more likely to bid the share price down, despite the positive cash flows. Free Cash Flow Per Share +1.00-2023 5-year trend Capital Expenditures-10.96 B: Free Cash Flow +99.58 B: Cash Flow Per Share +6.99-Free Cash Flow Per Share +5.35-Overview Financials Notes & Data. As another example, a company is selling off its assets, which results in substantial cash flows. In this situation, investors will still give the firm’s stock a high valuation, since they expect the company to eventually generate significant cash flows. For instance, if a company is in high-growth mode and is rapidly gaining market share, then it may be burning through its cash and is experiencing negative cash flows. There are several issues to consider as part of this analysis. If the firms market capitalisation is valued at Rs 1 billion, the stocks of the firm trade at 20 times free cash flow, which is Rs 1 billion per Rs 50 million. The formula is as follows:Ĭurrent share price / Cash flow per share = Price to cash flow ratio Understanding the Price to Cash Flow Ratio The price to cash flow ratio is calculated by dividing the current share price by the cash flow per share. How to Calculate the Price to Cash Flow Ratio Shares that appear to be underpriced in relation to the cash flows being generated for other comparable companies could be a reasonable investment. The ratio is used by investors to estimate the amount of cash flow that may be available for distribution to them as dividends, and also as a comparison to other potential investments. ![]() The price to cash flow ratio compares a stock price to its operating cash flow per share. ![]()
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