Sales to Cash Flow Ratio
posted on 06-06-2019
What it is:
How it works/Example:
Expressed on a per-share basis, the sales to cash flow ratio is calculated by dividing a company's sales volume per share in a given period by its per-share cash flow.
Higher ratios are preferable as they indicate increasing levels of financial strength.
For instance, if a company generates $1,000 in sales per share in a given period accompanied by a per-share cash flow of $250, its sales to cash flow ratio would be 4 ($1000 in sales / $250 cash flow = 4).