What is Cash Flow to Stockholders Calculator?
Cash Flow to Stockholders Calculator helps investors calculate how much cash flow has been paid to shareholders after net new equity has been raised and dividends have been paid.
The purpose of this calculation is to help investors understand how much cash a company generates and how much it distributes to shareholders.
CF = D – E
Where:
- CF = Cash Flow to Stockholders
- D = Total Dividends paid by the company
- E = Total Net New Equity Raised
In this formula, “D” represents the total amount of cash that has been paid out to stockholders in the form of dividends. Dividends are cash payments made by a company to its shareholders as a way of distributing profits. Dividends are typically paid on a regular basis (such as quarterly) and can be in the form of cash, stock, or other assets.
A company’s equity represents ownership in a company, and it can be represented in the form of common stock, preferred stock, or other types of securities. The “E” in the formula represents the total amount of new equity raised by the company during the period under analysis. A company is essentially selling equity in exchange for cash when it issues new equity.
As a result of the difference between dividends paid and net new equity raised, the cash flow to shareholders is equal to the amount of dividends paid. When a company generates more cash than it distributes to shareholders, it is referred to as a positive cash flow to stockholders. A negative cash flow to stockholders means the company has distributed more cash than it has generated.
Overall, the cash flow to stockholders calculation provides investors with important information about a company’s ability to generate cash and distribute it to shareholders. Investors can use a Cash Flow to Stockholders Calculator to make informed investment decisions by calculating this important financial metric quickly and easily.
