Price to Free Cash Flow Explained (P/FCF Ratio) | Valuation Metrics
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Price to Free Cash Flow
Price to Free Cash Flow is a valuation metric used by investors to determine how much they’re willing to pay for a company's stock compared to the free cash flow of that company.
Free cash flow is the amount of cash left over after a company has accounted for its cash outflows to support operations and maintain its capital assets.
It’s calculated by taking the company's share price and dividing it by the free cash flow per share.
Investors use the P/FCF multiple as a benchmark against other companies, industries or the market as a whole. It enables investors to determine whether one investment is cheap or expensive relative to the other.
The P/FCF alone is not enough to make an investment decision. It’s only one of the many metrics investors use to evaluate stocks.
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Free cash flow is the amount of cash left over after a company has accounted for its cash outflows to support operations and maintain its capital assets.
It’s calculated by taking the company's share price and dividing it by the free cash flow per share.
Investors use the P/FCF multiple as a benchmark against other companies, industries or the market as a whole. It enables investors to determine whether one investment is cheap or expensive relative to the other.
The P/FCF alone is not enough to make an investment decision. It’s only one of the many metrics investors use to evaluate stocks.
If you enjoyed this video please be sure to leave it a like and subscribe.
Please give it a share if you learnt something new!
2 سال پیش
در تاریخ 1401/04/06 منتشر شده
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