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Price to cash flow ratio
Understanding Limitations in Utilizing Price-to-Cash-Flow Ratios
December 3, 2023
What are the limitations of using price-to-cash-flow ratios for valuation?
Price-to-cash-flow ratios, while informative, have limitations in valuation. They might not account for differences in capital expenditure requirements or working capital needs among companies, potentially oversimplifying the assessment of a company's value based solely on its cash flow.
Tags : Price-to-Cash-Flow Ratio , Valuation Limitations , Financial Analysis