The Price/cash Flow Ratio Has Grown in Prominence and Use

question 204

True/False

The price/cash flow ratio has grown in prominence and use for valuing firms because many analysts contend that a firm's cash flow is less subject to manipulation than the firm's earnings per share.

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Definitions:

Automobile Industry

The sector of the economy that manufactures and sells motor vehicles, including cars, trucks, and motorcycles, playing a critical role in global transportation.

Textile Industry

An industry primarily concerned with the design, production, and distribution of yarn, cloth, and clothing. It was one of the earliest industries to industrialize in the 19th century.

Financial Savings

The portion of personal income that is set aside, not spent on immediate consumption, and typically put into a bank or investment account for future use.