The Price/Cash Flow to Industry Average percentage compares a company's price-to-cash-flow ratio with the average ratio for its industry. This metric helps investors determine whether a company is overvalued or undervalued relative to its peers in the same industry. A higher percentage indicates that the company is more expensive than the industry standard, potentially signaling overvaluation. Conversely, a lower percentage might suggest the company is undervalued. This ratio is commonly used to assess companies with steady cash flows, providing insight into their valuation based on cash generation rather than profits alone.
