During a recent year (ended December 31, 2011), Nicole's Getaway Spa (NGS) reported net income of \(\$ 2,300\). The company reported the following activities:

a. Increase in inventories of \(\$ 400\).

b. Depreciation of \(\$ 3,000\).

c. Increase of \(\$ 2,170\) in prepaid expenses.

d. Payments of \(\$ 4,600\) on long-term debt.

e. Purchased new spa equipment for \(\$ 7,582\).

f. Payments on accounts payable exceeded purchases by \(\$ 320\).
g. Collections on accounts receivable exceeded credit sales by \(\$ 859\).
h. Issued \(\$ 10,000\) of common stock.

Required:
1. Based on this information, prepare a statement of cash flows for the year ended December 31, 2011, using the indirect method. Assume the cash balance at December 31, 2010, was \(\$ 7,000\).
2. Calculate the capital acquisitions ratio (round to two decimal places). What does this tell you about NGS's ability to finance expansion with operating cash flows?