P/Operating CF
P/Operating CF shows how much investors pay for a company’s shares relative to the cash its operations generate.
How it is calculated
(Stock Price × Shares (Basic, Weighted) (latest quarter)) ÷ Operating Cash Flow (latest quarter)
Worked out for every trading day, from the latest reported figures on or before that day.
Quarterly and annual values are the daily value on the first trading day on or after each period end.
- Unit
- Ratio
- Periods
- Daily, Quarterly, Annual
- Source
- Calculated by stockrow from the inputs below
- Made from
- Stock Price, Shares (Basic, Weighted), Operating Cash Flow
Reading P/Operating CF
How to read it
The numerator is market value: the stock price times the weighted basic share count from the latest quarter. The denominator is operating cash flow from the latest quarter. A lower value means the market pays less for each dollar of operating cash; a higher one means it pays more. The price moves the ratio every trading day, while the share count and the cash flow change only when a new quarter is reported.
What is typical
Companies with steady cash generation and strong growth prospects tend to trade at higher multiples, while slower-growing or cyclical businesses usually sit lower. Businesses whose cash flow swings with the seasons or with working capital show a jumpier ratio. Compare the value with the median for the company’s sector rather than across industries.
Pitfalls
The denominator is the operating cash flow of the latest quarter alone, not a full year, so a seasonally weak or strong quarter can move the ratio sharply, and it is not directly comparable with a multiple built on annual cash flow. Negative operating cash flow gives a negative ratio. stockrow works the value out for every trading day from the latest reported figures on or before that day, so it can rest on numbers several months old. Quarterly and annual values are the daily value on the first trading day on or after each period end, not an average over the period.