I need help figuring out the Free Cash Flow and Cash Flow Adequacy ratio. All th

Question

I need help figuring out the Free Cash Flow and Cash Flow Adequacy ratio. All the information for the question is below.

Matt D CengageBrain-Login or X /CengageNow l Online te ×G Rollins Inc. is considering × -> C fi Dcvg.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do ::Apps Welcome, Sign In a Welco me to the Ano YARCC E-mail P Pandora Internet Rac a Amazon.com-Online My Noran Clinic Hom tba PM MathLab Pearson Dcengage Learning-E Assignment Score: 98.00% Assignment: Chapter 11 Homework Save Exit Submit Assignment for Gradin Question 3 of S Check My Work Email Instructor Questions SExercise 11-47 1. 2. O 3. 4. 0 S. O eBook OExercise 11-47 s. Preparing the Statement of Cash Flows The comparative balance sheets for Beckwith Products Company are presented below. 2013 2012 Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation 36,950 75,100 45,300 256,400 38,650 $375,100 25,000 78,000 36,000 153,000 20,000 $272,000 Liabilities and Equity: $ 13,100 11,500 8,100 105,000 100,000 137,400 $375,100 S 11,000 8,000 9,000 90,000 50,000 104,000 $272.000 Accounts payable Common stock Retained eamings Total liabilities and equity 1. Net income for 2013 was $58,400 2. Cash dividends of $25,000 were declared and paid during 2013 3. During 2013, Beckwith issued $50,000 of notes payable and repaid $35,000 principal relating to notes payable. 4. Common stock was issued for $50,000 cash 5. Depreciation expense was $18,650, and there were no disposals of equipment. 1. Prepare a statement of cash flows (indirect method) for Beckwith Products for 2013. Use a minus sign to indicate any decreases in cash or cash outflows. 6:55 PM 4/12/2016 Ask me anything

Explanation / Answer

Free cash flow = OCF -capital expenditure

                       = 75350 - 103,400

                       = - 28050

cash flow adequcay =cash flow from operations /( Long term paid + Fixed asset purchased +cash dividend distributed)

       = 75350 / (85000 + 103400 + 25000)

        = 75350 / 213400

         = .35

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