A drawback to the price-to-cash-flow method of valuation is that there is no generally accepted cash flow measure.

Question

Quizplus · Accepted Answer

The price-to-cash-flow method of valuation relies heavily on a measure of cash flow, but there is no universally accepted method for calculating or defining cash flow. Different industries and even different companies may have different interpretations of what should be included in cash flow calculations, making it difficult to compare valuations across the board.

A Drawback to the Price-To-Cash-Flow Method of Valuation Is That