5yr Growth Cash Flow = The five year geometric average growth rate of a company’s Cash Flow from operations (Cash Flow Statement). It is shown as a percentage, for example 3.3%.
The geometric average gives you the growth over the period by using the product of their values (as opposed to the arithmetic average which uses their sum). We use the geometric mean because it penalises (negative growth) declined much more than the arithmetic mean does.
We USE Approximating Geometric Mean
We use a useful formula for finding the approximate geometric mean, as we already have the arithmetic mean and the standard deviation.
It is: Geometric Mean = arithmetic mean - 0.5 × (standard deviation)². It gives results very close to the correct Geometric Mean.
How to use the ratio
Available as a screening ratio: Yes
Available as an output column ratio: Yes (Look for it under the Growth heading)
How to select companies the highest Cash Flow growth over 5 years
To find companies with the highest growth rate in Cash Flow over five years set the slider from 0% to 10%.
Remember:
All ratios are calculated on a trailing 12 months (TTM) basis.
This means the last twelve months (not the company’s financial year) is compared to the same period in the past.
We do this to make sure you screen on the most up to date financial results of the company.
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