Question 13: Which is typically bigger, 'operating free cash flow' (OFCF) or 'Net cash provided by operating activities' from the cash flow statement for a mature stable firm? Assume that CapEx is equal to depreciation plus amortisation

a. OFCF is bigger

b. Net cash provided by operating activities is bigger.

c. They're equal.

d. Not enough information is provided.

Question 3:

Investment bank Canaccord's Think Childcare (TNK) initiation of coverage states: "TNK reported an impressive set of results following its first full year as a listed entity. Revenue of $46.5m was 7% above prospectus forecasts of $43.4m; however, the company acquired two centres during the year. On a like-for-like basis (backing out the acquisitions), revenue still came in 5% above the prospectus forecasts, at $45.5m."

Which of the following statements is NOT correct? It's important to assess how much performance exceeded forecasts on a like-for-like basis since:

a. Expansion through acquisitions is typically more costly than organic expansion.

b. Successful word-of-mouth customer recommendations and advertising are less risky and more sustainable sources of growth compared to acquisitions.

c. Organic and acquisition-led growth both typically require extra external funding.

d. Acquisitions typically require a takeover premium which runs the risk of making them negative NPV investments.