Question

Analyze Priceline The Priceline Group Inc. (PCLN) is a leading provider of online travel reservation services, including brand names Priceline, KAYAK, and OpenTable. Selected cash flow information from the statement of cash flows for three recent years is as follows (in millions): Year 3 Year 2 Year 1 Net cash provided by operating activities $ 3,925 $ 3,102 $ 2,914 Net cash used for investing activities (3,333) (3,895) (2,358) Net cash provided by used for) financing activities 58 (730) 1,429 Additions to property, plant, and equipment (220) (174) (132) Repurchase common stock (1,014) (3,089) (750) Acquisitions and investments (8) (140) (2,496) a. Determine the net change in cash for each year. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Year 3: $ Year 2: $ Year 1: $ b. Determine the free cash flow for each year Year 3: $ 3,705 Year 2: $ 2,928 Year 1: $ 2,782 c. How is the free cash flow being used based on the data provided? The free cash flow has been used to purchase property, plant, and equipment. d. Which is better for measuring the cash flow available for investment, dividends, debt repayments, and stock repurchases: the change in cash for the period or the free cash flow? Free cash flow

Answer 1

Determine net change in cash for the year as follows: Year 3 $3,925 -$3,333 Year 2 $3,102 -$3,895 Year 1 $2,914 $2.358 Net cash provided by operating activities Net cash used for investing activities Net cash provided by used for) financing activities Net change in cash $58 $650 -$730 -$1,523 $1,429 $1,985 Note: All other parts are correctly defined.