2-9A. (Analyzing free cash flows) Following you will find our computation of the free cash flows for Johnson, Inc. Interpret the information in terms of where cash came from and where it was used.

The following financial statements are for Davis & Howard. Assume that you would be meeting with]osh Gray, the finn's controller. Based on the financials and the free cash flow computations, what would you tell Gray about his finn? What questions would you have for him?

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FREE CASH FLOWS FROM AN ASSET PERSPECTIVE (S IN THOUSANDS) After-tax cash flows from operations: Operating income Depreciation Earnings before interest, tax, depreciation Taxes After-tax cash flows from operations Other income (losses) $(597,683) 251,500 $ (346,183) $ (346,183) (104,388) $ (450,571) Change in net operating working capital: Change in cash $332,743 Change in inventories 191,145 Change in other current assets 64,036 Change in current assets $ 587,924 Change in accounts payable Change in net operating working capital 349,753 $ 238,171 Change in investments Change in fixed assets and other assets: Purchase of fixed assets Change in other assets Net cash used for investments Asset free cash flows $472,768 1,101,606 (154,261) $ 1,420,113 $(2,108,855) FREE CASH FLOWS FROM A FINANCING PERSPECTIVE Interest expense paid Plus increase in long-term debt Plus increase in short-term debt Plus increase in other current liabilities Plus increase in common stock Financing free cash flows $(87,966) 1,118,198 13,638 213,969 851,016 $2,108,855