Compute free cash flow. ( \(L O 7\) )

Use the Best Buy consolidated statement of cash flows to compute the company's free cash flow for 2005 and 2006. What does the free cash flow tell you about Best Buy?

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Best Buy Company, Inc. Consolidated Statements of Cash Flows (Sin millions) For the Fiscal Years Ended February 26, 2005 February 25, 2006 February 28, 2004 Operating Activities Net earnings $1,140 $ 984 $ 705 (Gain) loss from and disposal of discontinued operations, net of tax (50) 95 1,140 934 800 Earnings from continuing operations Adjustments to reconcile from continuing operations to total cash provided by operating activities from continuing operations: Depreciation Asset impairment changes Stock-based compensation Deferred income taxes Excess tax benefits from stock-based compensation Other, net Changes in operating assets and liabilities, net of acquired assets and liabilities: Receivables Merchandise izventories Other assets Accounts payable Other liabilities Accrued income taxes 456 159 4 132 (151) (33) (3) ' 385 22 22 (1) 8 (28) (14) 24 x 1. 8 (110) (30) (27) (457) (240) (507) (11) (50) (7) 586 847 272 165 243 250 178 901 197