Angel Corporation's free cash flow for the current year is $19,000, calculated by subtracting capital expenditures and dividends paid from the cash flow from operations.
Free Cash Flow (FCF) is calculated by subtracting capital expenditures from the cash flow from operations and then adjusting for dividends paid. In the case of Angel Corporation: =Cash Flow from Operations−Capital Expenditures−Dividends Paid
FCF=Cash Flow from Operations−Capital Expenditures−Dividends Paid
Substituting the provided values:
FCF = $75,000 - $50,000 - $6,000
FCF = $19,000
Therefore, Angel Corporation's free cash flow for the current year is $19,000. This positive free cash flow indicates that after covering operational needs and capital expenditures, the company has surplus cash that can be used for various purposes such as debt reduction, expansion, or additional dividends, contributing to the financial health and flexibility of the corporation.
Complete question:
In the current year, Angel Corporation generated $75,000 in cash flow from operations. Capital project expenditures amounted to $50,000, and dividends of $6,000 were paid. Calculate the free cash flow for Angel Corporation.