Dukas Corporation's net cash provided by operating
activities was $218,000; its net income was $203,000;
its capital expenditures were $146,000; and its cash
dividends were $49,000.
Required:
What is the company's free cash flow?
To calculate a company's free cash flow, you need to use the formula:
Free Cash Flow = Net Cash Provided by Operating Activities - Capital Expenditures
Given the information provided:
Net Cash Provided by Operating Activities = $218,000
Capital Expenditures = $146,000
Substituting the values into the formula, we have:
Free Cash Flow = $218,000 - $146,000
Simplifying the calculation:
Free Cash Flow = $72,000
Therefore, Dukas Corporation's free cash flow is $72,000.