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Welcome to The Motley Fool, trainwrecker,

could someone inform me on how to calculate a price to cash flow.

Divide a company's market capitalization (number of shares times share price) by its cash flow for the latest fiscal year.

Quote the Fool, "Cash flow is literally the cash that flows through a company during the course of a quarter or the year after taking out all fixed expenses. Cash flow is normally defined as earnings before interest, taxes, depreciation and amortization (EBITDA)."

Here's an example of calculating price-to-cash flow for Coca-Cola (KO) using their 1999 annual report (figures are as of 1999 year end):

Number of Shares - 2,470,000,000
Share Price - $58.25
Cash Flow - $2,332,000,000

Number of Shares * Share Price / Cash Flow = Price-to-Cash Flow

2,470,000,000 * 58.25 / 2,332,000,000 = 61.7

Hope This Helps,


P.S. Here's a Foolish link you might find helpful:
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