Cash flow from assets (CFFA) is also known as “Free cash flow” (FCF). CFFA (or FCF) is calculated by adding Net Income to Depreciation and Interest Expense, then subtracting capital expenditures for the period, and then subtracting any increases in net working capital required to keep the operation running and growing in accord with plans. NOW SUPPOSE that your business had 29,000 in Net Income; 1,700 in Depreciation Expense; 1,900 in Capital Expenditures; 5,500 in Interest Expense; and your Net Working Capital account was stable (NO CHANGE) across the period. FIND: CFFA I got 34,300. Is that correct?
Cash flow from assets (CFFA) is also known as “Free cash flow” (FCF). CFFA (or FCF) is calculated by adding Net Income to Depreciation and Interest Expense, then subtracting capital expenditures for the period, and then subtracting any increases in net working capital required to keep the operation running and growing in accord with plans. NOW SUPPOSE that your business had 29,000 in Net Income; 1,700 in Depreciation Expense; 1,900 in Capital Expenditures; 5,500 in Interest Expense; and your Net Working Capital account was stable (NO CHANGE) across the period. FIND: CFFA I got 34,300. Is that correct?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter6: Statement Of Cash Flows
Section: Chapter Questions
Problem 27E
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- Cash flow from assets (CFFA) is also known as “
Free cash flow ” (FCF). CFFA (or FCF) is calculated by adding Net Income toDepreciation and Interest Expense, then subtracting capital expenditures for the period, and then subtracting any increases in networking capital required to keep the operation running and growing in accord with plans. NOW SUPPOSE that your business had 29,000 in Net Income; 1,700 in Depreciation Expense; 1,900 in Capital Expenditures; 5,500 in Interest Expense; and your Net Working Capital account was stable (NO CHANGE) across the period. FIND: CFFA - I got 34,300. Is that correct?
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