Series 79: Price–to–Free Cash Flow Ratio

Taken from our Series 79 Top-off Online Guide

Price–to–Free Cash Flow Ratio

Some analysts prefer to use some measure of free cash flow instead of operating cash flow in computing the P/CF ratio, because they believe it produces a more realistic assessment of a company’s value. When using this ratio, it is generally more accepted to use free cash flow to equity (FCFE).

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