Cash flow per share

Cash flow per share,

Definition of Cash flow per share:

  1. Cash flow per share is the after-tax earnings plus depreciation on a per-share basis that functions as a measure of a firm's financial strength. Many financial analysts place more emphasis on cash flow per share than on earnings per share (EPS). While earnings per share can be manipulated, cash flow per share is more difficult to alter, resulting in what may be a more accurate value of the strength and sustainability of a particular business model.

  2. Cash flow per share is calculated as a ratio, indicating the amount of cash a business generates based on a company’s net income with the costs of depreciation and amortization added back. Since the expenses related to depreciation and amortization are not actually cash expenses, adding them back keeps the company’s cash flow numbers from being artificially deflated.

  3. The amount of cash on hand by a company after the issuance of bonds and stocks.

How to use Cash flow per share in a sentence?

  1. By adding back expenses related to amortization and depreciation, a cash flow per share valuation keeps a company's cash flow numbers from being artificially deflated.
  2. Because cash flow per share represents the net cash a company produces, some financial analysts view it as a more accurate measurement of a company's financial health.
  3. Cash flow per share functions as a measure of a firm's financial strength and is calculated as the after-tax earnings of a company plus depreciation on a per-share basis.

Meaning of Cash flow per share & Cash flow per share Definition