Picking Great Stocks (Part 2 of 4)
In this series there are four important ratios when looking at stocks. Price to cash, price to earnings, price to sales, and price to book. In part 1 of 4 we talked about price to earnings. In part 2 we are going to talk about price to cash.
What is it?
Simply, it’s the stock price divided by the cash and cash equivalents that the company has in their bank account. Basically it just tells you how much cash the company has on hand relative to the stock price.