The Cash Flow from Assets measures the cash flows generated by the firm's assets. It is also known as the Cash Flow of the Firm. These cash flows will be further categorized as Operating Cash Flow, Capital Spending, and Additions to Net Working Capital. The calculations illustrated on this page will refer to the Balance Sheet and Income Statement which follow.

Balance Sheet ($ in Millions)
Assets	1998	1997	Liabilities and Owners' Equity	1998	1997
Current Assets			Current Liabilities
Cash	690	600	Accounts Payable	530	460
Accounts Receivable	340	300	Notes Payable	240	240
Inventory	120	100	Total Current Liabilities	770	700
Total Current Assets	1150	1000	Long-Term Liabilities
			Long-Term Debt	571	710
Fixed Assets			Total Long-Term Liabilities	571	710
Property, Plant, and Equipment	1210	1200	Owners' Equity
Less Accumulated Depreciation	357	280	Common Stock ($1 Par)	122	120
Net Fixed Assests	853	920	Capital Surplus	218	210
			Retained Earnings	322	180
			Total Owners' Equity	662	510
Total Assets	2003	1920	Total Liab. and Owners' Equity	2003	1920

Income Statement ($ in Millions)
	1998
Sales	1710
Cost of Goods Sold	1100
Administrative Expenses	100
Depreciation	77
Earnings Before Interest and Taxes	423
Interest Expense	50
Taxable Income	373
Taxes	30
Net Income	343
Dividends	201
Addition to Retained Earnings	142

What is the Free Cash Flow?