Price / Cash Flow definition

The price / cash flow indicator of an enterprise shows how much an investor is willing to pay for each cash unit resulting from the operations of the company. This indicator is able to assess the business of a company in terms of its ability to generate cash flows and is a measure of liquidity and solvency.

Due to differences in accounting standards in different countries, it is not always possible to compare profit ratios in the statements.

Because of this, it is not always possible to compare price / income indicators. The price / cash flow indicator may be an international standard for assessing shares in relation to its financial results.