1. What is Cash Flow to Stockholders?

Cash Flow to Stockholders represents the net cash distributed to shareholders after accounting for any new equity raised. It's a key metric in corporate finance that shows how much cash is actually flowing to shareholders.

2. How Does the Calculator Work?

The calculator uses the Cash Flow to Stockholders formula:

Where:

• Dividends Paid — Total cash dividends distributed to shareholders
• Net New Equity Raised — Cash received from issuing new shares minus cash used to repurchase shares

Explanation: Positive values indicate net cash outflow to shareholders, while negative values indicate net cash inflow from shareholders.

3. Importance of Cash Flow to Stockholders

Details: This metric helps investors understand how much cash is being returned to shareholders versus how much is being raised from them. It's crucial for dividend analysis and understanding a company's financing activities.

4. Using the Calculator

Tips: Enter dividends paid and net new equity raised in dollars. Net new equity raised should be negative if the company repurchased more shares than it issued.

5. Frequently Asked Questions (FAQ)

Q1: What's included in dividends paid?
A: All cash dividends paid to common and preferred shareholders during the period.

Q2: How is net new equity raised calculated?
A: It's the cash received from issuing new shares minus cash paid for share repurchases.

Q3: Can cash flow to stockholders be negative?
A: Yes, when the company raises more in new equity than it pays out in dividends.

Q4: How does this differ from free cash flow to equity?
A: FCFE considers operating cash flows after capital expenditures, while this focuses only on dividend and equity transactions.

Q5: Why is this metric important for investors?
A: It shows whether the company is returning value to shareholders or requiring additional investment from them.