QUESTION 1 Calculate Clark Enterprise's Free Cash Flow assuming: Amounts (Smillions) Net Operating Profit After Tax Depreciation Gross Fixed Asset Change Current Account Change 933 200 -492 156 Enter your answer in $millions, without the "S".

QUESTION 1 Calculate Clark Enterprise's Free Cash Flow assuming: Amounts (Smillions) Net Operating Profit After Tax Depreciation Gross Fixed Asset Change Current Account Change 933 200 -492 156 Enter your answer in $millions, without the "S".

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter15: Statement Of Cash Flows

Section: Chapter Questions

Problem 7BE

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Cash Flow Statement Analysis

A company's cash flow is the movement of its cash inflows and cash outflows. A cash flow statement is prepared to determine changes in an organization's cash position. A cash flow statement shows how much money was generated and spent on the business during the fiscal year. The cash flow analysis is a method of analyzing an organization's investing, financing, and operating activities. A cash flow statement reveals an organization's liquidity and solvency, as well as its ability to change cash flows in the future. It eliminates the other effects of accounting methods by improving the comparability of different organizations' operational performance.

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Determining Net Cash Flow from Investing Activities Orlando Inc. reported the following information: 12/31/2019 12/31/2018 Furniture $46,000 $32,000 Accumulated depreciation 15,900 12,500 Investment (long-term) 38,000 50,000 In addition, Orlando sold furniture costing $8,000 with accumulated depreciation of $5,000 for $3,500. Orlando also reported a $3,000 gain on the sale of long-term investments. Required: Compute net cash flow from investing activities. Use a minus sign to indicate negative cash flows (outflows).
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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 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?
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