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Basic Question 3 of 7
Free cash flow can be measured as ______.
B. cash from operations - capital expenditure
C. net income + depreciation expense
A. cash - current liabilities
B. cash from operations - capital expenditure
C. net income + depreciation expense
User Contributed Comments 3
| User | Comment |
|---|---|
| chantal | In business valuation theory cash from operations - capital exenditures is defines as unlevered cash flows, ie cash flows which are available to repay debt or declare dividends. Free cash flow is defines as the amount of cash flows which are available to shareholders, ie after debt repayment... Consequently, it would appear that the formula for free cash flow must also deduct debt repayment obligations... |
| johntan1979 | Choose the best answer available: B |
| Inaganti6 | johntan marry me |
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Learning Outcome Statements
calculate and interpret free cash flow to the firm, free cash flow to equity, and performance and coverage cash flow ratios
CFA® 2025 Level I Curriculum, Volume 2, Module 5.