P/CF and CF per Share | Alpha Quadrant by The Fifth Person

Questions › Category: Valuation Quadrant › P/CF and CF per Share

WK asked 1 year ago

Hi Victor, In your video "PEG: How Peter Lynch Calculates Intrinsic Value" using Amazon as example, you use a P/CF ratio and CF per share. What is the CF here, is it FCF or OCF? Thank you.

1 Answers

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Victor Chng Staff answered 1 year ago

Hi Wee Kian,

I am using operating cash flow. I didn’t use free cash flow because it can be distorted by development-related capital expenditures. In Amazon’s case, operating cash flow is more consistent.