For the Years Ended December 31, 2022, and 2021, Janelle

question 87

Essay

For the years ended December 31, 2022, and 2021, Janelle Corporation reported the following selected information in its financial statements: Instructions
a) Calculate free cash flow for 2022 and 2021.
b) How is it possible that Janelle Corporation can have cash provided by operating activities of $ 400,000 for 2022 and only report profit of $ 154,000?
c) Comment on the changes in free cash flow from 2021 to 2022 and suggest how the company might improve its free cash flow in the future.

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Definitions:

Express Transactions

Express transactions involve rapid financial or goods exchanges, emphasizing speed and efficiency in the completion of the transaction.

Business Entity Assumption

An accounting principle that treats a business as separate from its owner or any other business.

Business Entities

Business entities refer to legally recognized organizations designed to provide goods or services.

Owners

Owners are individuals or entities that hold legal title to assets, businesses, or property.