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Suppose during 2022 that Cypress Semiconductor Corporation reported net cash provided by operating activities of $178,606,000,...

Suppose during 2022 that Cypress Semiconductor Corporation reported net cash provided by operating activities of $178,606,000, cash used in investing of $86,252,000, and cash used in financing of $14,736,000. In addition, cash spent for fixed assets during the period was $51,646,000. No dividends were paid. Calculate free cash flow. (Show a negative free cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) What is the free cash flow in dollars?

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Answer #1

Free Cash Flow Meaning :

The Companies Free cash flow is determined by Substracting the Capital Expenditure outlays from the cash provided from operating activities.

The free cash flow is a better metric used to determine the liquidity of company and  how efficiently the company  generates cash and uses the cash

FCF = Cash provided by operations - Capital expenditure ( cash spent for fixed assets)

Free cash flow = 178606000 USD - 51646000 USD = 126960000 USD

Note:

Cash used in Investing activities not taken as cash used for capital expenditure because there is no clear indication in the question regarding type of cash flow , ( it may be loss on sale of fixed assets etc...,)

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