Free cash flow equals:

Question

Quizplus · Accepted Answer

Free cash flow is the cash available to the company after all capital expenditures needed to maintain and grow the business have been paid. Therefore, free cash flow is calculated as net cash provided by operating activities minus cash payments earmarked for investments in plant assets (capital expenditures). Option A pertains to cash flows related to investing activities, and option B pertains to cash flows related to financing activities, which are not relevant for calculating free cash flow. Option D pertains to the net change in cash, which is not the same as free cash flow.

Free Cash Flow Equals