Free Cash Flow Per Share


DEFINITION of 'Free Cash Flow Per Share'

A measure of a company's financial flexibility that is determined by dividing free cash flow by the total number of shares outstanding. This measure serves as a proxy for measuring changes in earnings per share.

Calculated as:

Free Cash Flow Per Share


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BREAKING DOWN 'Free Cash Flow Per Share'

This measure signals a company's ability to pay debt, pay dividends, buy back stock and facilitate the growth of business. Also, the free cash flow per share can be used to give a preliminary prediction concerning future share prices. For example, when a firm's share price is low and free cash flow is on the rise, the odds are good that earnings and share value will soon be on the up, because a high cash flow per share value means that earnings per share should potentially be high as well.

  1. Cash Flow

    The net amount of cash and cash-equivalents moving into and out ...
  2. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  3. Dividend

    A distribution of a portion of a company's earnings, decided ...
  4. Free Cash Flow To Sales

    A ratio that illustrates the percentage of free cash flow to ...
  5. Cash Flow Per Share

    A measure of a firm's financial strength, calculated as: Cash ...
  6. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash ...
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  1. How can companies use the cash flow statement to mislead investors?

    Cash flow is a means for most investors to examine the actual economics of a business they might invest in, especially from ... Read Full Answer >>
  2. Can working capital be too high?

    A company's working capital ratio can be too high in the sense that an excessively high ratio is generally considered an ... Read Full Answer >>
  3. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  4. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  5. How do I use discounted cash flow (DCF) to value stock?

    Discounted cash flow (DCF) analysis can be a very helpful tool for analysts and investors in equity valuation. It provides ... Read Full Answer >>
  6. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>

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