Selected information (in thousands) for Reitmans (Canada) Limited and Le Chteau Inc. for fiscal 2015 follows: __________________________________________Reitmans
Question:
__________________________________________Reitmans Le Château
Net cash provided (used) by operating activities........$ 34,770...........$ (14,161)
Net capital expenditures.................................................33,291..................9,115
Dividends paid...............................................................12,782.......................-0-
Instructions
(a) Calculate the free cash flow for each company. Which company has the better free cash flow? Why?
(b) If a company has a negative free cash flow, does that necessarily imply that overall cash flow will be negative, too? Why or why not?
Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...
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a in thousands Reitmans Le Chteau Free cash flow 34770 33291 12782 11303 ...View the full answer
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Related Book For 
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119368458
7th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
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