Deleveraged operating cash flow to market value ratio
factor.formula
Net cash flow from operating activities for the last twelve months (TTM)
Net operating asset value on the day
Net operating asset value = Financial liabilities - Financial assets + Total market value
Deleveraged operating cash flow/market value of operating net assets = Net cash flow from operating activities in the last 12 months (TTM) / market value of operating net assets on that day
This factor is calculated by dividing the net cash flow from operating activities (CFO_TTM) in the last 12 months by the net operating asset market value (NMV_Op) on that day, thereby measuring the operating cash flow generated by each unit of net operating asset market value. Its core logic is to use the cash flow generated by the company's operating activities to measure the company's ability to create value, and compare it with the company's operating net asset market value to evaluate its return on capital.
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The net cash flow generated from operating activities in the last 12 months reflects the company's cash inflows and outflows from its main business, excluding the impact of financing and investment activities.
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The market value of net operating assets is calculated by adding financial liabilities to the total market value and subtracting financial assets. It reflects the market value of assets related to the operation of the enterprise.
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The financial liabilities of an enterprise include liabilities of a financial nature such as debt instruments.
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The financial assets of an enterprise include assets of a financial nature such as trading financial assets.
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The total market value of a company, which is the stock price multiplied by the total number of shares issued.
factor.explanation
This factor aims to assess the intrinsic value of a company by more accurately matching cash flow to value. Using cash flow from operating activities (CFO_TTM) instead of net profit can more accurately reflect the company's true profitability because it is not affected by accounting standards. Adjusting the market value to the operating net asset market value (NMV_Op) can more reasonably measure the value of the company's operating assets, making the ratio more economically explanatory. This factor is mainly used in value investment strategies to find undervalued operating assets that can generate higher cash flows.