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Homework answers / question archive / You are an investor looking to buy an ownership interest in a business
You are an investor looking to buy an ownership interest in a business. One company is a manufacturing company and the other is an online retailer. Here are the cash flow summaries for both:
MFR ONLINE RETAILER
Cash from Operations $75,000 $15,000
Cash from Financing 50,000 75,000
Cash from Investing <75,000> <25,000>
Net Free Cash Flow $50,000 $65,000
If your most important investment criterion is "quality of cash flow" which of these two companies would you choose to invest your money in? Why?