Show Publishing recently reported $13,000 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had $3,500 of bonds with a 6.25% interest rate, and its federal-plus-state income tax rate was 21%. During the year, the firm had expenditures on fixed assets and net operating working capital that totaled $1,550. These expenditures were necessary to sustain operations and generate future sales and cash flows. What was its free cash flow? Also, what does free cash flow mean to a company?
Show Publishing recently reported $13,000 of sales, $5,500 of operating costs other than
The operating cash flow is crucial because it is related to the cash generated or used y the operations of the business operations. The cash flows from operations are needed for long-term survival and growth. The operating activities include the day-to-day operations of the entity.
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