GlaxoSmithKline, the global maker of medicines, vaccines, and consumer health-care products and headquartered in the United Kingdom,

Question:

GlaxoSmithKline, the global maker of medicines, vaccines, and consumer health-care products and headquartered in the United Kingdom, reported net cash inflow from operating activities of £6,250 million in 2011. The company included the following among its items in the investing and financing sections of its cash flow statement (in millions of British pounds):

Purchase of property, plant, and equipment ....... £ (923)

Purchase of intangible assets ............ (405)

Purchase of equity investments ........... (76)

Purchase of businesses, net of cash acquired ........ (264)

Dividends paid to shareholders ........... (3,406)

Compute GlaxoSmithKline’s free cash flow in at least two ways. Discuss the adequacy of the company’s free cash flow.

Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented... 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...