Price cash flow ratio is more important, price earnings ratio or not.
Revenue, excluding payments for depreciation and amortization. I think the amortization and depreciation for the payment of debt and interest. Financial terms from Yahoo: Cut: The loan repayment period depreciation.:. Non-cash charges that are sources of free cash flow. The amount allocated during amortize the cost of purchased assets over the long term life of the asset. Cash flow: cash flow in investment income before depreciation,. Amortization and non-cash charges. Sometimes called cash earnings. Cash flow from operations. (Called funds from operations by. Real estate investment and those of other deposits). It is important to show the ability to pay dividends.
Dont be confused by the definition yahoo. Them. arent great. This is your personal definition of amortization and depreciation. Depreciation: If the company purchased a T-shirt made in. 2006 For $ 100 would not be cost free. $ 100 of a total in 2006. They must disperse a cost of more time to make shirts for them. Tell them that a life year. 10. In that time, they will be depreciation. $ 10 each year 2006-2016. But this is considered non-cash expense due account of the cash they will not actually decrease the amount all year. In fact they only go down by. $ 100 in 2006. But the key is the difference between cash flow and income statements. Cut: the same thing, but often intangible. Items. Assumed that drug companies buy patents from companies. B for $ 100. If they know that the life of a patent. 10 years and they will pay $ 10 per year as amortization expense. But again, non-cash charges. To answer your question it depends. Problems with p / e is the income of all relevant technical accounting may not reflect. Actual nature of the business. In contrast, cash does not lie. Cash flow is cash flow. But may be misleading if looking in vacuum. Think shirts t-example above. In the first. Year, you may have a negative cash flow because you spend more money buying. But nothing related or not, you will need to follow to make that investment. In another 10 years. Hope that helps.
