Description: Elon Musk says that if he completes his planned acquisition of Twitter, then up to 75% of the employees could get their pink slips. Analyst Dan Ives stated that a 75 per cent cut in Twitter’s staff would create “stronger free cash flow and profitability,” both of which could attract investors to Musk’s deal. Of course, Ives tempered this view with the notion that “you can’t cut your way to growth.”
Date: October 21, 2022
1) Are you a Twitter user? How many of your classmates use it regularly?
2) If you were an accountant working at Twitter, how would this news impact your morale?
3) Pages 14-20&21 of Wiley’s Financial Accounting: Tools for Business Decision-Making discuss the performance measure Free Cash Flow. How is this measure calculated?