What is the Sales to Cash Flow Ratio?
How Does the Sales to Cash Flow Ratio Work?
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).
Why Does the Sales to Cash Flow Ratio Matter?
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