Question

Suppose in a recent quarter, Alliance Atlantis Communications Inc. reported net cash provided by operating activities of $45,600,000 and revenues of $264,800,000. Cash spent on plant asset additions during the quarter was $1,600,000. No dividends were paid. Calculate free cash flow.

Answer 1

Answer:

Free cash flow = $44,000,000.

Explanation:

Free cash flow represents the amount that is left to all the providers of  capital after the payment of all all operating expenses, working capital and investment in fixed asset expenditures.

It is computed as cash flow made from operation less capital expenditures

For Atlantic Communications

Free cash flow = $45,600,00 - $1,600,000

                        =  $44,000,000.

Free cash flow = $44,000,000.