Price to Cash Flow Ratio Calculator: P/CF, P/FCF, Cash Flow per Share and Fair Price
Calculate the price to cash flow ratio (P/CF) per share or from company totals, with P/FCF, cash flow yield, P/E and the price at a target multiple.
How it works
P/CF = share price ÷ operating cash flow per share = market capitalization ÷ operating cash flow · cash flow per share = operating cash flow ÷ diluted shares · cash flow yield = 1 ÷ P/CF · P/FCF = price ÷ ((operating cash flow − capital expenditures) ÷ shares) · price at target = target multiple × cash flow per share
The price to cash flow ratio tells you how many dollars investors pay for each dollar of cash a company’s operations bring in over a year. It works like the P/E ratio but uses operating cash flow instead of net income. Because depreciation, amortization and other non-cash charges are added back, P/CF is less affected by accounting choices and is useful for capital-heavy businesses whose earnings are depressed by large depreciation charges. You can enter per-share figures, as data sites show them, or company totals: market capitalization divided by operating cash flow gives the same answer as price divided by cash flow per share. With capital expenditures the calculator also shows price to free cash flow (P/FCF), the stricter version that deducts the investment needed to sustain the business, and with net income it shows P/E so you can see how far earnings and cash flow diverge. The cash flow yield is the inverse of the multiple. Under More options, a target multiple, such as the sector average or the stock’s own 5-year average, turns the ratio into a rough fair price. P/CF completes the family of price multiples alongside P/E, price to book and price to sales. Like them it is a comparison tool: a ratio is only cheap or expensive relative to similar companies and to the stock’s history. Use diluted shares and trailing-twelve-month cash flow for the most current reading.
Worked example
A stock trades at $42.50 and the company has 50,000,000 diluted shares, so its market capitalization is $2,125,000,000. Over the last twelve months it generated $260,000,000 of operating cash flow, or $5.20 per share, so P/CF = $42.50 ÷ $5.20 = 8.17× and the cash flow yield is 12.24%. After $95,000,000 of capital expenditures, free cash flow is $165,000,000 ($3.30 per share), so P/FCF = 12.88×. Net income of $150,000,000 ($3.00 per share) gives a P/E of 14.17×. At a target multiple of 10× cash flow the shares would be worth 10 × $5.20 = $52.00, 22.4% above today’s price.
Sources: Omni Calculator: Price to cash flow ratio (Company X example) · Wall Street Prep: Price to cash flow ratio (market cap ÷ CFO, Company B example) · Corporate Finance Institute: Price to cash flow ratio
Frequently asked questions
What is a good price to cash flow ratio?
There is no universal number. Many value investors look for P/CF below about 10, but the right level depends on growth and industry: utilities and industrials often trade at single-digit multiples while software companies can trade at 20× or more. Compare a stock with its peers and its own history.
What is the difference between P/CF and P/FCF?
P/CF uses operating cash flow. P/FCF uses free cash flow, which is operating cash flow minus capital expenditures. P/FCF is stricter because it counts the money a company must reinvest to keep its business running, so it is always higher than P/CF for a company that invests.
Why use P/CF instead of P/E?
Net income includes non-cash expenses such as depreciation and can be shifted by accounting choices. Operating cash flow is harder to manage, so P/CF is often a cleaner comparison, especially for capital-intensive companies. It also works when earnings are negative but cash flow is positive.
How do I calculate cash flow per share?
Divide operating cash flow by diluted shares outstanding. For example, $2,000,000 of cash flow and 1,000,000 shares give $2.00 per share; at a $50.00 share price, P/CF is $50 ÷ $2 = 25×.
Can P/CF be negative?
Mathematically yes, if operating cash flow is negative, but the result has no valuation meaning. For companies burning cash, analysts look at the cash balance, the burn rate and price to sales instead.
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Educational estimate, not investment advice. Valuation multiples do not predict future returns.