Cash Flow per Share (v6145.00), when used over an extended period of time with Marketable Securities (v2017) and Unused Debt Capacity (v3560), can measure a company's ability to pay dividends. Cash Flow from Operations (v4100), on which Cash Flow per Share (v6145.00) is based, is a principal component of Shareholder Value (v5070). Cash Flow per Share (v6145.00) is defined as follows:
Cash Flow from Operations (v4100.00)
No. of Common Shares: Wtd. Average (v3410.00)
This definition differs from another common formula used by security analysts, where depreciation expense and amortization of intangibles are added to net income to arrive at an estimation for cash flow used in their cash flow per share calculations.
Cash Flow from Operations (v4100) (combined with the changes in Debt Capacity) must be sufficient to cover investment requirements and interest payments on debt. Unless it is, the company's solvency is deteriorating, and remedial steps must be taken before the company's financial position is jeopardized.