Question

Information for two companies in the same industry, Skysong Corporation and Sheridan Corporation, is presented here. Skysong Corporation Sheridan Corporation Cash provided by operating activities $166,000 $166,000 Net earnings 240,000 240,000 Capital expenditures 71,000 97,000 Dividends paid 6,800 27,000 Compute the free cash flow for each company. Skysong Corporation Sheridan Corporation Free cash flow

Answer 1

See below

Step-by-step explanation:

Fee cash flow computation for SKYsong corporation.

Free cash flow

Net earnings

$240,000

Cash provided by operating activities

($166,000)

Capital expenditures

($71,000)

Dividends

($6,800)

Cash flow balance

($3,000)

Free cash flow computation for Sheridan Corporation

Free cash flow

Net earnings

$240,000

Cash provided by operating activities

($166,000)

Capital expenditures

($97,000)

Dividends

($27,000)

Cash flow balance

($50,000)