Price to Operating Cash Flow

What is the definition of P/OCF?

A valuation metric that compares a company's market price to its level of annual operating cash flow. This is similar to the valuation measure of price-to-free cash flow but uses a looser measure of cash flow, by not deducting capital expenditures.

Operating cash flow, aka. "cash inflow from operating activities", is the amount of actual cash made by a company's business. It is similar to operating profit but without the accruals.


Stockopedia explains P/OCF...

In general, the higher this measure, the more expensive the company. There are several advantages that the P/CF holds over other investment multiples - most notably the fact that, in contrast to earnings, sales or even book value, companies have a harder time manipulating cash flow.


Which Guru Screens is P/OCF used in?

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  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
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