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QuestionsCategory: Valuation QuadrantAmazon Price to Cash Flow Average
Joyce Low asked 3 months ago

Hi Victor,
I’ve tried to calculate and plot the Price to Cash Flow chart for Amazon but it seems didn’t go well.
Based on what you have shared in the live webinar, the P/CF average is 29.25 yet what I get was 1.58. Not sure where goes wrong, could you enlighten me?
Thank you.

MJ replied 3 months ago

Try this site – there are some sites that give the info we need, dunno how accurate it is, but saves a lot of time and work, and looks pretty ok:
https://www.macrotrends.net/stocks/charts/AMZN/amazon/price-fcf

Joyce Low replied 3 months ago

Thanks you for the info! :))

2 Answers
Victor Chng answered 3 months ago

Hi Joyce,
 
I cannot see your data points from the image. You may want to send the excel file to victor@fifthperson.com for me to take a look. 
 
 

Joyce Low replied 3 months ago

Hi Victor,
Thanks for your reply. I’ve just sent over my excel file. Thank you.

Victor Chng answered 3 months ago

Hi Joyce, 
 
I managed to find your issue. Amazon recently did a share split. Hence, the share price you have collected is a post-split price. The problem lies in your number of shares; it is not adjusted for splits. To solve the issue, you must multiply the yearly shares by 20. Once done, you can re-input the cash flow per share, and the problem will be solved. 
 
Hope this helps :)

Joyce Low replied 3 months ago

Hi Victor,

Thanks for spending time in solving my issue! Really appreciate it :))

Victor Chng replied 3 months ago

Welcome Joyce :)