Knapp Inc.’s financial statements are provided below. Using this information, compute the firm’s free cash flows and the financing cash flows, and interpret your results.

We should be subtracting actual taxes paid, which is frequently different from the income tax expense shown in the income statement. But let’s just keep things simple and assume they are the same for Walmart.

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Knapp Inc. Balance Sheet at 12/31/2017 and 12/31/2018 Cash Accounts receivable Inventory Current assets Plant and equipment ASSETS 2017 2018 $ 200 $ 150 450 425 550 625 $1,200 $1.200 $2,200 $2,600 Less accumulated depreciation (1,000) (1,200) Net plant and equipment. Total assets $1,200 $1,400 $2,400 $2,600