What is Free Cash Flow Per Share?
Free cash flow per share is a profitability ratio that describes the ratio of a company’s free cash flow to outstanding shares.
How to Calculate Free Cash Flow Per Share
Free cash flow per share is calculated by dividing free cash flow by weighted-average common shares outstanding.
Free cash flow is calculated by subtracting capital expenditures and cash dividends paid from net operating cash flow, all found on the cash flow statement.
Weighted-average common shares outstanding can usually be found on a consolidated statement of operations, or the balance sheet in the equity section.
How to Interpret Free Cash Flow Per Share
In general, investors want to see positive and increasing free cash flow per share over time.