Financial Planner

Answer: D - Price/free cash flows focus on growth in cash flows versus earnings and used in conjunction with P/E ratio. The price to cash flow ratio is defined as the market value divided by per-share cash flow. Because the emphasis is placed on growth in cash flows versus earning it is used in conjunction with the P/E ratio. The earnings are often subject to accounting manipulation, whereas cash flows are often more stable. Cash flows are often used to predict financial strength and potential problems.