Glossary

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Price to Cash Flow Ratio PCF

Fundamental Analysis

The Price to Cash Flow Ratio (PCF) is a financial metric used in fundamental analysis to evaluate the overall value of a company. It is calculated by dividing the current market price of a company’s stock by its operating cash flow per share. This ratio is useful in determining how much cash a company is generating compared to its current market valuation.

Investors use this ratio to evaluate a company*s financial strength and growth potential by comparing its PCF with industry averages and its own historical PCF. A high PCF ratio indicates that a company is generating more cash per share than its stock price suggests, making it potentially undervalued. Conversely, a low PCF ratio may suggest that the company is overvalued or may be experiencing cash flow problems.

The formula to calculate the Price to Cash Flow Ratio is as follows:

Price to Cash Flow Ratio (PCF) = Market Price per Share / Operating Cash Flow per Share

Where,

Operating Cash Flow per Share = Operating Cash Flow / Number of Shares Outstanding.

Overall, the PCF ratio gives valuable insight into a company*s financial performance and is a useful tool for investors in making informed investment decisions.

More Glossary Terms Beginning with P

Paediatric Exclusivity
means, in the US, a six-month period of exclusivity to market a drug which is awarded by the FDA in return for certain paediatric clinical studies using that drug. This six-month period runs from the date of relevant patent expiry.

Health Care Term Letter: P
Paid Development Method
An actuarial method to estimate ultimate losses for a given cohort of claims such as an accident year/product line component. If the paid-to-date losses are then subtracted from the estimated ultimate losses, the result is an indication of the unpaid losses. The basic premise of the method is that cumulative paid losses for a given cohort of claims will grow in a stable, predictable pattern from y

Insurance Term Letter: P
Panelboards
Oriented strand board, particleboard, medium density fibreboard and plywood. Operating Statistics

Manufacturing Term Letter: P
Partial Remission PR
A decrease in the size of a tumor, or in the extent of cancer in the body, in response to treatment.

Health Care Term Letter: P
Particleboard
A panelboard produced by chemically bonding clean sawdust, small wood particles and recycled wood fibre under heat and pressure. Forestry & Wood Products Industry Operating Statistics

Manufacturing Term Letter: P
Particulate Matter
Total suspended particulate. A measure of the solid particles (wood, process dust and smoke) found in air emissions.

Manufacturing Term Letter: P
Particulates
Tiny particles of a substance.

Manufacturing Term Letter: P
Passenger Load Factor
Represents the total number of seats sold as a percentage of total seat capacity on all sectors flown. Airline Industry

Transportation Term Letter: P
Passenger Mile Yield
The amount of passenger revenue earned per revenue passenger mile during a reporting period Airline Industry

Transportation Term Letter: P
Passenger revenue yield per Mile Average Yield per RPM
Represents the average scheduled passenger fare revenue for each revenue passenger mile (RPM), or each mile a scheduled revenue passenger is flown. Airline Industry

Transportation Term Letter: P
Passive Immunotherapy
Immunologically active material transferred into the patient as a passive recipient. Monoclonal antibodies are considered Passive Immunotherapy since antibodies are generated outside the body and given to the patient

Health Care Term Letter: P
Patent Term Extension
means an extension of up to five years in the term of a US patent relating to a drug which compensates for delays in marketing resulting from the need to obtain FDA approval.

Health Care Term Letter: P

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Book Value Per Common Share
Shareholders equity divided by the shares outstanding.

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Debt to Equity Ratio
A financial strength ratio that measures proportion of companys Debt to Stockholders Equity. Debt to Equity Ratio displays companys indebtedness and the leverage of Stockholders Equity. The number indicates how much company owes of total Debt for one dollar of stockholders equity. The lower the number, the stronger the balance sheet of the company. Debt to Equity Ratio Formula = (Debt / Stockholde

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Earnings per Share EPS Growth Rates
The percentage of EPS change within a specific period (Y/Y year on year; Seq sequential, from proceeding period; TTM trailing twelve months).

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Fundamentals are used to evaluete companys performance, using formulas and ratios like (price to earnings ratio PE (P/E), growth rates, quick ratio ...). Fundamentals ratios are calculated using companys assets, revenus, earnings, cash flow .... Investiors use fundamentals to estimate the intrinsic value of securities.

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Gross Margin
The measurement of profitability, gross margin represents proportion of gross profit (total sales less cost of goods sold) to total sales. Gross Margin Formula = (Gross Profit / Revenues) * 100

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Gross Profit Margin
The measurement of profitability, gross profit margin represents proportion of gross profit (total sales less cost of goods sold) to total sales. Gross Margin = (Gross Profit / Revenues) * 100

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Income Per Employee
A ratio that measures companys productivity by dividing Income earned over the past twelve months, by the number of employees. Income Per Employee displays how much a single employee contributes to the net income of the company in the period of 12 months. Income Per Employee Formula = (Net Income / Employee)

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A financial strength ratio that measures a companys ability to service its interest payments. Interest Coverage Ratio below 1 indicates the company is not generating sufficient income to cover its interest payments. Interest Coverage Ratio Formula = (Ebitda / Interest expense )

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Inventory Turnover Ratio
A ratio that measures companys ability to sell and replace its inventory. High ratio indicates that company is able to sell its inventory in the short period. Declining ratio indicates inventory build up. There are two ways to calculate Inventory Turnover Ratio Inventory Turnover Ratio Formula = (Sales / Inventory) Inventory Turnover Ratio Formula = (Cost of Goods Sold / Inventory) The benefit of

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