Nobody downloaded yet

Free cash flow - Research Paper Example

Comments (0) Cite this document
It also forms a basis of calculating the operating cash flow margin, which provides a crucial perspective for calculating the long-term cost trends of a…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.2% of users find it useful
Free cash flow
Read TextPreview

Extract of sample
"Free cash flow"

Download file to see previous pages It is therefore the cash flow that remains after the firm makes investment in property, plant and equipments. Often, financial analysts consider free cash flow to be more efficient in measuring the strength of a business than the cash flow from operating activities. To remain competitive large companies and other forms of businesses will need to invest in new equipments in order to maintain its competitive nature. These investments affect the level of free cash flow that the business is able to maintain (Yuangchih, 412).
“This study investigates the ability of Free Cash Flow to predict performance in capital intensive and non-capital intensive industries”. (Nunez, 120). Nunez argues that, “many financial scholars and researchers have focused on studying the effectiveness of operating cash flow as a measure of a firm’s performance although other researchers have proved that free cash flow is a better measure since it greatly considers capital intensity”. “Free cash flow as a measure of a firm’s performance is not easy to manipulate compared to the other measures such as earnings, Nunez states. He further states that, “there are various methods used by different firms in determining their actual free cash flow but there is however no specific guidance given regarding the calculation and this is because its disclosure is not a requirement by the US GAAPs”. “The few firms that report their free cash flow therefore use the operations based method while others use the income based method” (Nunez, 121). Nunez stresses that, “Firms that base their calculation on operations use a capital maintenance perspective whereby free cash flow is calculated as cash flow from operating activities less capital that are necessary to maintain the firm at a productive capacity and this observes the guidance provided in the International Accounting Standards Board (IAS 7)”. “The operations based method also uses a perspective ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Free cash flow Research Paper Example | Topics and Well Written Essays - 2500 words - 1”, n.d.)
Free cash flow Research Paper Example | Topics and Well Written Essays - 2500 words - 1. Retrieved from
(Free Cash Flow Research Paper Example | Topics and Well Written Essays - 2500 Words - 1)
Free Cash Flow Research Paper Example | Topics and Well Written Essays - 2500 Words - 1.
“Free Cash Flow Research Paper Example | Topics and Well Written Essays - 2500 Words - 1”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
SAAB's Cash Flow Problems
...? SAAB’s Cash Flow Problems of the of the SAAB’s Cash Flow Problems Q. “Cash flow problems are one of the most common reasons for business failure. Discuss why this was the case using the car company Saab. Provide recommendations as to how they could have improved their cash flow problems.” Introduction When we say that cash is king we mean that ultimately it is the cash flow of a business that is the most important factor in sustaining it and giving it life. While people often talk of accrual accounting or matching the revenues and expenses of a period...
6 Pages(1500 words)Coursework
Cash Flow Problems
...?Business failure is “the occurrence where a business entity is forced to cease and close down its operations, after it fails to generate enough cashto cover the expenses it incurs and thus fails to make any profits” (Hughes, 2010, p.115). Such business failure can be caused by cash flow problems. Cash flow on the other hand refers to the inflow and outflow of cash into a business. Car Company Saab had to close down its business operations, after it failed to meet its expenses of paying its suppliers, who in turn stopped supplying the company with requisite materials. The company could also not afford to generate sufficient income to pay the salaries and...
6 Pages(1500 words)Coursework
...? Cash Flow Cash Flow ments Home Products Opening Balance of Cash/Cash Equivalents 545 421 Cash Flow from Operations Net Cash provided in operating activities Total Net Income 3,883 3,338 Depreciation and Amortization 1682 1718 Stock-based Compensation Expense 215 214 Decrease(Increase) in Receivables (170) (102) Decrease (Increase) in Inventories 256 (355) Decrease (Increase) in Other Current Assets 159 12 Increase (Decrease) in Accounts Payable & Accrued Expenses 422 (133) Increase (Decrease) in Deferred Revenue (29) 10 Increase (Decrease) in Income Taxes Payable 14 (85) Increase...
3 Pages(750 words)Assignment
Cash Flow
...? CASH FLOW Introduction The case “Eat at My Restaurant” reviews the cash flow of several companies such as Panera Bread, Starbucks, and Yum Brands. Starbucks is the premier retailer and roaster of speciality coffee and it operates in more than 50 countries around the world. Panera Bread Company and its subsidiaries are popularly referred to as “Panera” or “Panera Bread”. The company is a national bakery cafe that owns over 1450 companies and also operates with franchises in bakery. The company has dominant presence in Columbia and Ontario, Canada where it operates in 40 states. Yum Brands Inc. operates six in different segments including YUM Restaurant International, Pizza Hut (US), Taco Bell (US), KFC (US), A&W All American Food... ...
3 Pages(750 words)Case Study
Cash Flow
...Free cash flow is arrived at after subtracting capital expenditure from operating cash flows. Free cash flows refer to the cash that a firm has left over after including all the expenses incurred over the financial period. Caledonia Company should focus on the project’s free cash flow as opposed to the accounting profits because a positive cash flow means the company has money to continue investing in the project. An accounting profit does not necessary mean a positive cash...
1 Pages(250 words)Assignment
Cash Flow the flow would be useful in explaining performances of a company. The amount that companies invest in capital expenditures is the main components illustrated in the investment section while finance sourcing activities especially from outside are reflected in the section on financing activities (Wise, 2006). References Dreyer, J., Erasmus, P., Morrison, J., & Hamman, W. (2013). Sustainable company growth as measured by cash flow. Management Dynamics, 22(2), 16-28. Kousenidis, D. V. (2006). A free cash flow version of the cash flow statement: A note. Managerial Finance, 32(8), 645-653. Stoddard, S....
2 Pages(500 words)Essay
Cash flow
...Finance and Accounting it is written on order instructions what you need to do exactly Contents Contents 2 Task 3 Task 2:- 5 Task 3:- 5 Task 4:- 7 References 8 Appendices 9 Task 1:- The net profit and the cash generated from operating activities of a company might not be equal for a same period of time because cash flow and net profit are different from each other. Cash flow can be defined as the money which comes in and goes out due to different financial, investment operating activities. On the other side, net profit is the amount remained from sales revenue after the deductions of all expenses of the firm. We follow the accrual method of accounting...
4 Pages(1000 words)Coursework
Accounting Cash Flow
... This report compares the cash flow for Coca Cola and Pepsi using their and annual reports for their cash flows. a. Compare and contrast, over two consecutive operating periods, the respective net cash flows from Operating Activities of the two companies. For both of the two companies, Pepsi and Coca Cola, the cash flow experienced increased from 2011 to 2012. The comparison of these two companies will be based on their total cash flow from operating activities, in which both of them witnessed an increase, from 8.4 M to 9.6 for Pepsi and from 9.4 to 10.6 for Coca Cola. However, as shown in the above values, Coca Cola witnessed more cash flows from the activities as compared to its competitor. The main reason for the difference... is that...
3 Pages(750 words)Coursework
Cash Flow
...CASH FLOW Unit This paper talks about cash inflows and outflows in an organisation. It attempts to compare and contrast the two types of cash flow statements, that is direct and indirect cash flow statements. Either of these two types can be adopted to be used by a CFO within an organisation. Key Words: cash flow, CFO, direct cash flow, indirect cash flow Introduction Operating, investing and financing are the three sets of activities contained in the cash flow statement sections. The...
1 Pages(250 words)Essay
Statement of Cash Flow
...ment of Cash Flow of ment of Cash Flow A ment of cash flow is a financial report that outlines and details the sources of an organization’s cash and the manner in which it is spent in a given period and it does not contain any non-cash items such as depreciation (Epstein & Jermakowicz, 2007). It is a financial statement useful in the determination of the short- and medium-term feasibility of an organization. It is of the essence to study the cash flow statement of an organization because cash management influences the performance, especially for small...
1 Pages(250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Research Paper on topic Free cash flow for FREE!
Contact Us