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标题: Financial Reporting Problem [打印本页]

作者: baldmice 时间: 2009-5-5 09:46 标题: Financial Reporting Problem

Hi, I can't understand the following question. Hope someone share your thoughts. Thanks.

The EP Co. had cash flow from operations of $30 million. EP reported the following:

(In Million)
                                                                       2000                     2001
Property, Plant, and Equipment (gross)                $100                     $110
Less accumulated depreciation                               60                        65
Property, Plant, and Equipment (net)                      40                        45

What is EP's free cash flow for the period?
A $20
B $40
C $35
D $30

The answer is B. Why?

作者: 290037082 时间: 2009-5-7 02:08 标题: [讨论]

because when we doing sth about the cash flow, we do not count the depreciation

so it is 10 million only

[此贴子已经被作者于2009-5-7 13:17:33编辑过]

作者: baldmice 时间: 2009-5-7 06:00

QUOTE:

以下是引用290037082在2009-5-7 2:08:00的发言：

because when we doing sth about the cash flow, we do not count the depreciation

so it is 10 million only

[此贴子已经被作者于2009-5-7 2:08:26编辑过]

I am sorry, but still confused...
The 30 million is not net income. It is operation cash flow, which does not include the depreciation. So what justifies the additional 10 million?

作者: 290037082 时间: 2009-5-7 12:20 标题: [讨论]

Free cash flow: after-tax before interest cash flow from operation minus new investment.

free cash flow is not from net income.

[此贴子已经被作者于2009-5-7 12:22:01编辑过]

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