Title:
Non-Cash Investing and Financing Activities and Free Cash Flow
Non-Cash Investing and Financing Activities and Free Cash Flow
Author(s)
Mulford, Charles W.
Ely, Michael L.
Patel, Amit
Martins, Mario
Ely, Michael L.
Patel, Amit
Martins, Mario
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Abstract
Items of property, plant and equipment are often acquired through non-cash investing and financing activities. In these transactions, equipment-purchase financing is provided at the time of purchase. While such transactions increase a company's productive capacity, they are not reported as capital expenditures in the statement of cash flows. Accordingly, free cash flow calculated based on capital expenditures reported in the statement of cash flows will often be overstated when assets are acquired through such non-cash transactions. In this report we look at a series of non-cash investing and financing transactions and assess their effects on calculated free cash flow.
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Date Issued
2004-12
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205822 bytes
Resource Type
Text
Resource Subtype
Technical Report