Free cash flow to the amount of money that a company has after maintaining its assets. Free cash flow is calculated by adding net income to depreciation and then subtracting changes in working capital and capital expenses from the result. The free cash flow per share is used by investors to determine how much money a company has to put towards expansion and dividends on a per-share basis.
Things You'll Need
- Annual report
Look up the free cash flow of the company in the company's annual report.
Look up the number of shares of stock the company has outstanding in the annual report.
Divide the free cash flow by the number of shares to find the free cash flow per share. For example, a company had $45 million in free cash flow and 30 million shares, you would divide $45 million by 30 million to get a free cash flow of $1.50 per share.