Bundle: Financial & Managerial Accounting, 14th + Working Papers for Warren/Reeve/Duchac's Corporate Financial Accounting, 14th + Working Papers, ... & Managerial Accounting, 14th + CengageNOWv2,

14th Edition

ISBN: 9781337804011

Author: Carl Warren, James M. Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Textbook Question

Chapter 13, Problem 4ADM

Priceline: Free cash flow

Priceline Group, Inc. is a leading provider of online travel reservation services, including brand names Priceline, KAYAK, and OpenTable. Selected cash flow information from the statement of cash flows for three recent years is as follows (in millions):

	Year 3	Year 2	Year 1
Net cash provided by operating activities	$ 2,914	$ 2,301	$ 1,786
Net cash used in investing activities	(2,349)	(2,162)	(1,563)
Net cash provided by (used in) financing activities	1,429	(404)	669
Additions to property, plant, and equipment	(132)	(84)	(55)
Repurchase common stock	(750)	(884)	(257)
Acquisitions and investments	(2,146)	(1,997)	(1,587)

A. Determine the net change in cash for each year.
B. Determine the free cash flow for each year.
C. How is the free cash flow being used based on the data provided?
D. Which is better for measuring the cash flow available for investment, dividends, debt repayments, and stock repurchases: the change in cash for the period or the free cash flow? Explain.

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Chapter 13, Problem 3ADM

Chapter 13, Problem 13.1TIF

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Chapter 13 Solutions

Bundle: Financial & Managerial Accounting, 14th + Working Papers for Warren/Reeve/Duchac's Corporate Financial Accounting, 14th + Working Papers, ... & Managerial Accounting, 14th + CengageNOWv2,

Ch. 13 - Prob. 1DQ Ch. 13 - Prob. 2DQ Ch. 13 - A corporation issued 2,000,000 of common stock in...Ch. 13 - A retail business, using the accrual method of...Ch. 13 - If salaries payable was 100,000 at the beginning...Ch. 13 - Prob. 6DQ Ch. 13 - A corporation issued 2,000,000 of 20-year bonds...Ch. 13 - Fully depreciated equipment costing 50,000 was...Ch. 13 - Prob. 9DQ Ch. 13 - Name five common major classes of operating cash...

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Solution Summary: The author explains that the statement of cash flows shows the net changes in cash and cash equivalents of a company. The free cash flow is used to make acquisitions and investments.

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