What is a stock's price-to-operating cash flow per share ratio?

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by joelle , in category: Stocks and Equities , a year ago

What is a stock's price-to-operating cash flow per share ratio?

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1 answer

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by jamir , a year ago

@joelle 

The price-to-operating cash flow per share ratio is a valuation metric used to compare a company's stock price relative to its operating cash flow. It is calculated by dividing the stock's market price per share by the company's operating cash flow per share.


The operating cash flow per share is determined by dividing the company's operating cash flow by the number of shares outstanding. Operating cash flow represents the cash generated by a company's core business operations, excluding any financing or investing activities. It provides insights into the company's ability to generate cash from its day-to-day operations.


By comparing the stock price to the operating cash flow per share, this ratio helps investors assess the stock's value relative to the company's cash flow generation. A lower ratio may suggest that the stock is undervalued, while a higher ratio might indicate that the stock is overvalued.