question archive During the year, Xero, Inc
During the year, Xero, Inc
Subject:FinancePrice:2.86 Bought3
During the year, Xero, Inc., experienced an increase in net fixed assets of $302,000 and had depreciation of S198,000. It also experienced an increase in current assets of $149,000 and an increase in accounts payable of $73,000. If operating cash flow (OCF ) for the year was $704,000, calculate the firm's free cash flow (FCF) for the year. The free cash flow (FCF ) is $1. (Round to the nearest dollar.)
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| 1] | FCF = OCF-Capital expenditure-Change in NWC | |
| 2] | OCF [given] | $ 704,000 |
| 3] | Capital expenditure = Increase in net fixed assets+Depreciation = 302000+198000 = | $ 500,000 |
| 4] | Change in NWC = Increase in current assets-Increase in accounts payable = 149000-73000 = | $ 76,000 |
| 5] | Therefore, FCF = 704000-500000-76000 = | $ 128,000 |
