Price to Cash Flow
The price to cash flow ratio is a valuation tool used to assist buyers and sellers of stock in determining timing of purchases or the disposition of shares. Unlike the other valuation ratios, this particular ratio utilizes the cash flows statement in determining the outcome. The formula is simple:
Price to Cash Flow = $Market Price of a Share of Stock
Cash Flow in Dollars Per Share of Stock
To illustrate, lets take a look at the price to cash flow for a share of Walmart stock. The current price for a share of Walmart stock is $98.87 (noon) on 03/21/19. The most recent reporting of cash flow from their 4th quarter 2018 financial statements is $17.4 Billion for the year (Ending on 01/31/19). Total number of shares in the market on the same date are
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