Sales Cash Flow

The definition of ‘sales to cash flow’

Sales ratio cash flow is the comparison of the company’s sales to its cash flow. It shows how effectively a business turns receiving revenue (sales) into cash for business. Sales ratio the cash flow is expressed per share and is calculated by dividing sales per share cash flow per share:

Sales to cash flow ratio =

The Sale Of One Share Of_____
Cash Flow Per Share

Higher scores are more favorable, suggesting a positive financial stability of the company. Sales ratio cash flow is an important indicator for assessing financial sustainability, as it takes into account the volume of production of the enterprise (sale) as the primary means of incoming cash flow.

The breaking down of the ‘sales to cash flow’

Two metrics used in sales ratio cash flow sales per share and cash flow per share. Sales per share (also known as EPS) is a ratio which is calculated from the total revenue received per share during the 12-month period. It is calculated by dividing total revenue (fiscal year) weighted average of shares outstanding (during the same financial year):

Sales Per Share =
Total Revenues____
Average Shares

Cash flows of the company per share is another indicator of financial stability, which is calculated by subtracting preferred dividends from operating cash flow and dividing the difference by common shares outstanding:

Cash Flow Per Share =

(Operating Cash Flow – Preferred Dividends)
Of Ordinary Shares In Circulation

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