Information for two companies in the same industry, Flounder Corp. and Oriole Co
ID: 2330652 • Letter: I
Question
Information for two companies in the same industry, Flounder Corp. and Oriole Company, is presented here.
Flounder Corp.
Oriole Company
Compute free cash flow for both companies and compare. (Show a negative free cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Flounder Corp.
Oriole Company
$
$
Flounder Corp.
Oriole Company
Net cash provided by operating activities $ 86,710 $ 97,500 Average current liabilities 45,000 101,500 Net income 215,600 215,600 Capital expenditures 38,570 74,520 Dividends paid 5,120 9,450Explanation / Answer
Free cash flow = Net cash provided by operating activities - Capital expenditure-Dividend paid
Flounder Corp's free cash flow is better.
Flounder Corp. Oriole Company Net cash provided by operating activities 86710 97500 Capital expenditures -38570 -74520 Dividends paid -5120 -9450 Free cash flow 43020 13530