Price-cashflow-ratio

To determine the price-cash flow ratio (PCR) the access to cash assets in relation to the price of a stock during a given period will be considered. This key figure indicates how much a share of cash flow is worth on the stock market (in EUR). The PCR can supplement or replace the price-earnings ratio, when the latter, for example, has little meaning due to a negative operating result of the corporation. In addition, the PCR is considered less susceptible to balance sheet "makeovers" since the cash flow cannot be influenced by accounting policy-motivated factors, such as hidden assets. However, cash flow tends to vary more than returns do, so the key figure must be observed and averaged over several years.

A stock is considered the less expensive the lower its PCR is.