Final answer:
The correct term for cash provided by operations after subtracting capital expenditures and cash dividends is Free Cash Flow (FCF). This measure indicates a company's ability to generate cash after funding operating expenses and investment in its fixed assets.
Step-by-step explanation:
The term that describes cash generated from operations after deducting capital expenditures and cash dividends is known as Free Cash Flow (FCF). This metric is crucial for investors and analysts as it provides insight into a company's financial flexibility and its ability to expand operations, reduce debt, pay dividends, or repurchase stock. Free cash flow is calculated by taking the net cash provided by operating activities (obtained from the cash flow statement) and subtracting capital expenditures and dividends paid.
To illustrate, if a company's net cash from operations is $500,000, capital expenditures are $100,000, and cash dividends are $50,000, the free cash flow would be $500,000 - $100,000 - $50,000 = $350,000. This is a simplified scenario, and in real-world applications, other adjustments might be necessary to compute the free cash flow.
Therefore, the correct answer to the student's question is A) Free cash flow.