Free Cash Flow per Share

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Free Cashflow per Share is the amount of Free Cashflow per outstanding share of the company™s stock. Free Cash Flow is considered one of the most important parameters to measure a company™s earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year™s Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.