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Price-to-Cash-Flow Ratio Calculator

Enter the share price and cash flow per share to get the P/CF ratio and cash flow yield.

How it is calculated

The tool divides the current share price by the cash flow per share: P/CF = price ÷ CFPS, and also gives the reverse as a percentage, cash flow yield = CFPS ÷ price × 100. Both amounts must be in the same currency and both must be above zero; a company with negative or zero cash flow gives no result, because the ratio has no useful meaning there. CFPS is usually operating cash flow divided by the number of shares outstanding, but the tool does not calculate it for you: which cash flow figure you use (operating, or free after capital spending) changes the answer, so use the same definition for every company you compare. The ratio is rounded to two decimals.

Worked example

A share trades at 48.50 and the company generates 6.25 of cash flow per share. Step 1: P/CF = 48.50 ÷ 6.25 = 7.76. Step 2: cash flow yield = 6.25 ÷ 48.50 = 0.1289, shown as 12.89%. So investors pay about 7.76 for each unit of annual cash flow, which is a yield of about 12.9% on the price.

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Common mistakes

  • Dividing the price by total company cash flow instead of cash flow per share.
  • Using cash flow per share from one definition for one company (operating) and another (free cash flow) for the next, which makes the ratios not comparable.
  • Using last year's cash flow with today's price in a company whose cash flow is changing quickly.
  • Treating a low P/CF as automatically cheap, without checking debt or whether cash flow is one-off.
  • Comparing P/CF across very different industries; a normal level for one sector can be high for another.

Sources

About this calculator

This calculator computes the price-to-cash-flow (P/CF) ratio as share price ÷ operating cash flow per share, and its inverse, the cash flow yield (cash flow per share ÷ price), expressed as a percentage. A P/CF of 10 means investors are paying $10 for every $1 of cash flow the company generates per share.

Value investors favor P/CF over the more common price-to-earnings ratio because cash flow is harder to distort with non-cash accounting choices — depreciation methods, accruals, one-time charges — that can inflate or deflate reported earnings without affecting actual cash generated. It's especially useful for comparing capital-intensive companies where depreciation policy differences make P/E comparisons misleading.

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Comments (1)

  • Editorial team

    A P/CF number says little on its own; it is more useful against the same company's own past values and against peers that define cash flow the same way. The yield line is the same fact flipped, but the cash flow is the company's, not yours, since only what it pays out as dividends or buybacks reaches shareholders. A company with zero or negative cash flow returns no result here. Which cash flow definition do you prefer, operating or free?

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