Cash Earnings per Share (cash EPS) is a financial performance indicator comparing cash flow to the number of outstanding shares. Cash EPS is different from the EPS or Earnings per Share which compares a company’s net income on a per share basis. As it does not include non-cash components like depreciation which is included for EPS calculation, Cash EPS may be considered to be a more reliable measure of financial health and operational efficiency.
Cash EPS Explained
The higher a company’s cash EPS, the better is its performance for the period under consideration.
Cash EPS of a company can be used for comparison with other companies in its line of business.
Calculation of Cash EPS:
Cash EPS = Operating Cash Flow/Diluted Shares Outstanding
Where EPS = Earnings per share
