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Cash flow to sales ratio

Cash flow to sales ratio

Description

Cash flow to sales ratio shows the amount of operating cash flows per one dollar of sales. In short, it represents a company’s ability to turn its’ sales into cash. Data to calculate this ratio is collected from income and cash flow statements.

Norms and limitations

The higher value of this ratio, the better it is for the company.

It is recommended to compare this ratio to those of the companies, working within the same industry.

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