What ratio focuses on growth in cash flows versus earnings and used in conjunction with P/E ratio?

Question

Quizplus · Accepted Answer

Price/free cash flows focus on growth in cash flows versus earnings and used in conjunction with P/E ratio. The price to cash flow ratio is defined as the market value divided by per-share cash flow. Because the emphasis is placed on growth in cash flows versus earning it is used in conjunction with the P/E ratio. The earnings are often subject to accounting manipulation, whereas cash flows are often more stable. Cash flows are often used to predict financial strength and potential problems.

What Ratio Focuses on Growth in Cash Flows Versus Earnings