Ratios: Free Cash Flow
ABC Company’s Statement of Cash Flows indicated the following:Cash Flows from Operating Activities $120,000; Cash Flows from Investing Activities ($80,000); and Cash Flows from Financing Activities $200,000. Other information includes the purchase of Land for $25,000 and Machinery for $15,000. During the year, ABC Company paid $10,000 in dividends. What is ABC’s free cash flow?
XYZ Company uses the indirect method to calculate cash flows from operating activities. This year the cash flows from operating activities totaled $60,000. The company paid $10,000 in dividends and obtained a loan from the bank of $50,000. The company also purchased Equipment for $20,000 and Land for $10,000. What is XYZ’s free cash flow?