Scenario presets
Per-Share Equity & Cash Flow Inputs
Primary Per-Share & Valuation Multiples
Cash Flow Per Share (CFPS)
$6.00
High Cash Generation
Price to Cash Flow (P/CF)
20.00x
P/E Multiple: 30.00x
CFPS vs EPS Spread
+$2.00 / sh
1.50x Cash Conversion (High Quality)
Free Cash Flow Per Share
$5.25
4.38% FCF Yield
Valuation & Dilution Sensitivity Stress-Testing
Matrix 1: CFPS ($) vs CFO Shocks & Share Count
Varying Operating Cash Flow (±20%) vs Diluted Shares (±20%).
Matrix 2: Price-to-Cash-Flow Multiple (P/CF)
Evaluating valuation multiple across share price shifts vs cash flow delivery.
Comprehensive Per-Share Cash Flow & Earnings Schedule
Step-by-Step Worked Calculation Example
Follow this end-to-end mathematical walkthrough using our baseline parameters to audit each intermediate metric.
- Calculate Available Operating Cash Flow for Common Equity:
Available CFO = Operating Cash Flow ($1,200M) - Preferred Dividends ($0M) = $1,200M. - Calculate Cash Flow Per Share (CFPS):
CFPS = Available CFO ($1,200M) / Diluted Shares (200M) = $6.00 per share. - Calculate Diluted Earnings Per Share (EPS):
EPS = Net Income ($800M) / Diluted Shares (200M) = $4.00 per share. - Determine Earnings Quality Spread & Cash-to-Earnings Ratio:
Per-Share Cash Spread = CFPS ($6.00) - EPS ($4.00) = +$2.00 per share.
Cash-to-Earnings Ratio = $6.00 / $4.00 = 1.50x. Operating cash generation exceeds accounting net income by 50%, validating conservative accounting and high earnings quality. - Calculate Free Cash Flow Per Share (FCFPS):
Free Cash Flow = $1,200M - CapEx ($150M) = $1,050M.
FCFPS = $1,050M / 200M shares = $5.25 per share.
FCF Yield = ($5.25 / $120.00 Share Price) × 100% = 4.38%. - Compare Valuation Multiples:
Price to Cash Flow (P/CF) = $120.00 / $6.00 = 20.00x.
Price to Earnings (P/E) = $120.00 / $4.00 = 30.00x. The stock trades at a much cheaper multiple on liquid cash (20.0x) than on reported accounting net income (30.0x).
Interactive Concept Self-Check Quiz
1. Why is Cash Flow Per Share (CFPS) less susceptible to corporate manipulation than EPS?
2. What does a situation where EPS is $3.00 but CFPS is only $1.20 indicate?
3. If a firm has CFO $400M, CapEx $100M, and 100M shares, what is its Free Cash Flow Per Share?
4. Why are preferred dividends deducted from Operating Cash Flow when computing CFPS?
Frequently Asked Questions
Cash Flow Per Share (CFPS) measures the net operating cash generated per common share: CFPS = (Operating Cash Flow - Preferred Dividends) / Diluted Weighted Average Shares. Unlike Earnings Per Share (EPS), which is subject to non-cash accrual estimates, revenue recognition timing, and depreciation methods, CFPS reflects real liquid dollars collected, providing an unmanipulated gauge of financial strength.
To calculate CFPS, preferred dividends are subtracted from Operating Cash Flow because preferred shareholders have senior claims over common shareholders. The remaining operating cash is divided by diluted weighted average shares outstanding (including in-the-money options and warrants) to reflect the true per-share cash entitlement of common equity.
A CFPS-to-EPS ratio significantly greater than 1.0x indicates high earnings quality, where accounting net income is backed by strong cash collections and depreciation tax shields. Conversely, a ratio below 1.0x (where EPS exceeds CFPS) warns that profits are trapped in expanding accounts receivable or unsold inventory, signaling aggressive accounting or credit collection risk.
Operating CFPS measures gross cash generated by operations per share before capital reinvestment. Free Cash Flow Per Share (FCFPS) deducts capital expenditures (CapEx) from operating cash flow: FCFPS = (CFO - CapEx - Preferred Dividends) / Diluted Shares. FCFPS represents the actual discretionary cash available per share for dividend payouts, debt paydown, or share repurchases.