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Free Cash Flow Is Equal to Cash Flow from Operating

question 83

True/False

Free cash flow is equal to cash flow from operating activities minus necessary capital expenditures and normal dividend payments.


Definitions:

Credit Balance

The amount of money in a financial account that indicates that a customer has funds or credits available to them.

Consolidated Cash

The total cash and cash equivalents held by a parent company and its subsidiaries, presented as a single figure on consolidated financial statements.

Common Stock

A type of equity ownership in a corporation, representing a claim on a portion of the company’s profits and the right to vote on matters affecting the company.

Acquisition

The process of obtaining control of another company by purchase or exchange of stock.

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