Information for two companies in the same industry, Ivanhoe Company and Swifty C
ID: 2508348 • Letter: I
Question
Information for two companies in the same industry, Ivanhoe Company and Swifty Corporation, is presented here Swifty Ivanhoe Company Net cash provided by operating activities Average current liabilities Net income Capital expenditures Dividends paid $78,070 45,200 186,400 37,950 5,300 Corporation $101,800 98,900 186,400 70,120 9,410 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).) Ivanhoe Company Swifty Corporation Free cash flow 's free cash flow is betterExplanation / Answer
Free cash flow = Net cash flow from operating activities - Capital expenditures - Dividends paid
Ivanhoe Company:
Free cash flow = $78,070 - $37,950 - $5,300 = $34,820
Swifty Corporation:
Free cash flow = $101,800 - $70,120 - $9,410 = $22,270