Assume that financial statements are properly prepared with all necessary detail

Finance Dec 19, 2020

Assume that financial statements are properly prepared with all necessary detail. Which one of the following financial statements is sufficient for you to compute the free cash flow to equity in any given year?

	a.	The Income Statement
	b.	The Balance Sheet
	c.	The Statement of Cash Flows
	d.	The Statement of changes in Owners' Equity

Expert Solution

Option C : The statement of cash flow

To compute free cash flow to Equity, we required cash flow from operations, capital expenditure and external financings & repayments, which we can get from the statement of cash flows.

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