What is Free Cash Flow per Share?

Free cash flow per share measures the amount of cash spun off by a business. A significant amount of free cash flow per share, and especially when it is trending up, indicates that a business has sufficient cash to pay down debt, acquire assets, pay dividends, and so forth.

How to Calculate Free Cash Flow per Share

The calculation of free cash flow per share is total free cash flow, divided by the weighted average number of shares outstanding during the measurement period. The formula is as follows:

Free cash flow ÷ Weighted average number of shares outstanding = Free cash flow per share