Murphy & Murphy Enterprises expects the following for 2018: Net cash provided by operating activities of $ 228 comma 000. Net cash provided by financing activities of $ 15 comma 000 Net cash provided by investing activities of $ 68 comma 000 Cash dividends paid to stockholders of $ 19 comma 000. The on plans to spend $ 104 comma 000 to purchase equipment. What is the expected amount of free cash flow for 2018?
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Free cash flow (FCF) is a measure of a company's financial performance that shows how much cash is available for the company to repay creditors or pay dividends and interest to investors. FCF is calculated by subtracting capital expenditures from the net cash provided by operating activities.
Here's how you can calculate Murphy & Murphy Enterprises' expected free cash flow for 2018:
1. Take the net cash provided by operating activities. Net cash provided by operating activities = $228,000
2. Subtract the planned capital expenditures (CAPEX), which is the amount planned to be spent on purchasing equipment. Capital expenditures (CAPEX) = $104,000
So, the free cash flow is calculated as follows:
Free Cash Flow (FCF) = Net cash provided by operating activities - Capital expenditures
Free Cash Flow (FCF) = $228,000 - $104,000
Free Cash Flow (FCF) = $124,000
The expected amount of free cash flow for Murphy & Murphy Enterprises in 2018 is $124,000.