How To Calculate Free Cash Flow Per Share [With Examples]
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Free cash flow–or FCF–is an
Free cash flow–or FCF–is an important measure of a company’s future financial health and success. Calculating it can be confusing, so in this video, we’ll cover the basics of what free cash flow is, why it’s important, and how to calculate it.
So what exactly is free cash flow? Free cash flow is a measure of the available cash that a business has after subtracting its capital expenditures from its operating income. It’s essentially the amount of money left over for shareholders after operating expenses have been paid for and investments in projects or equipment has been made. This metric is important because it helps investors understand how much money is available for dividends or stock repurchases, which can increase shareholder value.
To calculate free cash flow per share, you’ll need to begin with your company’s net income, which can be found on its balance sheet. Subtract any non-cash expenses, such as depreciation and amortization, from your net income number to arrive at your operating income figure. Next, subtract capital expenditures–or CAPEX–from your operating income number to get your free cash flow figure. Finally, divide this number by the number of outstanding shares to get your free cash flow per share figure.
Free Wisesheets account: https://www.wisesheets.io/?utm_medium...
📈 Free stock analysis spreadsheet templates:
1. Excel roaring kitty (DFV) analysis template: https://wisesheets.io/assets/discord_...
2. Excel discounted cash flow model (DCF): https://wisesheets.io/assets/dcf.xlsx
3. Google Sheets stock tracker: https://docs.google.com/spreadsheets/...
4. Google Sheets roaring kitty (DFV) analysis template: https://docs.google.com/spreadsheets/...
Looking for a written version of this video, check it out here: https://blog.wisesheets.io/how-to-cal...
🗣 Connect on social media:
https://www.tiktok.com/@wisesheets?la...
Instagram: wisesheets
Discord: discord
0:00 Intro
0:23 Free cash flow per share formula
1:16 Free cash flow per share calculation example
4:30 Automatic free cash flow per share
8:05 Conclusion
#stockanalysis #financialanalysis
So what exactly is free cash flow? Free cash flow is a measure of the available cash that a business has after subtracting its capital expenditures from its operating income. It’s essentially the amount of money left over for shareholders after operating expenses have been paid for and investments in projects or equipment has been made. This metric is important because it helps investors understand how much money is available for dividends or stock repurchases, which can increase shareholder value.
To calculate free cash flow per share, you’ll need to begin with your company’s net income, which can be found on its balance sheet. Subtract any non-cash expenses, such as depreciation and amortization, from your net income number to arrive at your operating income figure. Next, subtract capital expenditures–or CAPEX–from your operating income number to get your free cash flow figure. Finally, divide this number by the number of outstanding shares to get your free cash flow per share figure.
Free Wisesheets account: https://www.wisesheets.io/?utm_medium...
📈 Free stock analysis spreadsheet templates:
1. Excel roaring kitty (DFV) analysis template: https://wisesheets.io/assets/discord_...
2. Excel discounted cash flow model (DCF): https://wisesheets.io/assets/dcf.xlsx
3. Google Sheets stock tracker: https://docs.google.com/spreadsheets/...
4. Google Sheets roaring kitty (DFV) analysis template: https://docs.google.com/spreadsheets/...
Looking for a written version of this video, check it out here: https://blog.wisesheets.io/how-to-cal...
🗣 Connect on social media:
https://www.tiktok.com/@wisesheets?la...
Instagram: wisesheets
Discord: discord
0:00 Intro
0:23 Free cash flow per share formula
1:16 Free cash flow per share calculation example
4:30 Automatic free cash flow per share
8:05 Conclusion
#stockanalysis #financialanalysis
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