Calculations based on a per share basis focus on the financial impact to the company's shareholders. The most widely quoted per share calculation is EPS. Wall Street analysts calculate this number to make forward-looking EPS projections based on their earnings models and to make their investment recommendations. Another widely used share calculation is dividends per share (DPS). Because the number of shares outstanding serves as the denominator in share-based calculations, any number that appears in a company's financial statements (balance sheet, cash flow statement and income statement) may translate on a per share basis. However, it is not necessary to do so and the results may have no bearing on the financial performance of the company as a whole.
Cash Flow Statement
In business, cash is king and the cash flow statement shows a company's cash position for a specific period. The cash flow statement divides the company's cash flow sources into three segments: cash from operating, investing and financing activities. Cash flow from operating activities includes net income for the period and all cash and non-cash items that are a use or source of cash. For example, because depreciation is a non-cash expense, the cash flow from operating activities adds it back to net income as a source of cash. Cash inflows and outflows from investing activities include capital expenditures and income from securities investments. Financing activities show cash inflows and outflows such as a debt or equity issuance (source of cash) and dividend payment (use of cash).
Cash Flow Per Share
Cash flow per share is not a widely quoted financial calculation and is not a required financial disclosure. To calculate cash flow per share, divide a company's total cash flows by its shares outstanding. Or, you can show cash flow per share from operating, investing and financing activities separately. Of all three, perhaps cash flow per share from operations provides a meaningful interpretation as a company's operating activities represent its core business. A company that generates a higher level of operating cash flow is in a healthy position to reinvest in the business, buy back stock or pay dividends. Technically, the difference between the cash flow per share from operating activities and EPS is the company's sources and uses of cash from its investing and financing activities.
Interpreting the Results
In essence, calculating cash flow per share, perhaps with the exception of cash from operating activities, does not yield any new information or results, which is why companies are not required to report cash flow per share. Companies can disclose this number but it doesn't shed any new light on the company's financial standing. For instance, a large influx of cash from an equity offering (reported in cash from financing activities) distorts cash flow per share.