The price-to-cash flow ratio measures the value of a stock’s price relative to its cash flow per share. The ratio uses a definition of cash flow which adds back to net income before extraordinary items the main non-cash expenses: depreciation and amortization. It is especially useful for valuing stocks that have positive cash flow but are not profitable because of large non-cash charges.

The price-to-cash flow ratio measures how much cash a company generates relative to its stock price, rather than what it records in earnings relative to its stock price, as measured by the price-earnings ratio. The price-to-cash flow ratio is said to be a better investment valuation indicator than the price-earnings ratio, because cash flows cannot be manipulated as easily as earnings, which are affected by depreciation and other non-cash items. Some companies appear unprofitable because of large, non-cash expenses even though they have positive cash flows.

 

Availability

These ratios combine data from from line item filings and factors that use prices (click here for the line-item reference). Which price is used in the calculation depends on the period. The latest close price is used for ratios that involve the latest financials, like the most recent quarter or the latest trailing twelve fiscal months (TTM). For ratios that involve older financials, like the quarter one year ago, or the TTM one year ago, the price used for the calculation is the average price during the following quarter.

Quarterly values from Income & Cashflow statements are annualized to make the resulting factor more readily comparable with 12-month factors. The annualization is done by multiplying the quarterly figures by approximately 4 (depends on the actual number of days in the period).

You can either use a prebuilt ratio or use the function to define your own.

Function

RatioName(offset,type)
offset: 0-25 (for interim) 0-10 (for annual)
type: QTR (for interim), ANN (for annual), TTM (for trailing twelve months)

For example to screen for stocks whose P/E today is less than their P/E from their previous fiscal 4 quarters enter:

PEExclXor(0,TTM) < PEExclXor(4,TTM)

The above can also be done using prebuilt ratios:

PEExclXorTTM < PEExclXorPTM

Prebuilt Ratios

Prebuilt ratios are available for these periods:

Period	Description	Price	Line Item
Q	Recent Quarter	Close(0)	(0, QTR)
PQ	Prior Quarter	Avg nextQ	(1, QTR)
PYQ	Prior Year Quarter	Avg nextQ	(4, QTR)
TTM	Trailing Twelve Months	Close(0)	(0, TTM)
PTM	Prior TTM	Avg nextQ	(4, TTM) **
A	Recent Annual	Avg nextQ	(0, ANN)
PY	Prior Year	Avg nextQ	(1, ANN)

** PTM offset is 4 , not 1, since it uses interim periods