#3 show work

2. (15 pts) Fitch Inc.'s financial statements are as follows: HiTech, Inc. Balance sheet For Periods that Ended 12/31/x7 and 12/31/x8 (in 5000) ASSETS 12/31x7 $ 2,165 Cash 12/31/28 $ 2,647 HiTech Inc. Income Statement For the Period ended 12/31/x8 (in $000) Sales $40.506 COGS 14.177 Gross $26.329 Margin Expense 119487 EBIT $6,842 Interest 180 EBT $6662 Tax (34%) 2.265 Net Income $4,397 4.832 13.217 $ 10.214 5.614 2.843 $ 11.104 Accounts receivable Inventory CURRENT ASSETS Foxed Assets Gross Accumulated Depreciation S 35 183 (22,640) $39,456 (24,852) $12, 543 $22.757 $14.604 $25,708 $ 1,642 438 $ 2,080 $1,420 1.228 $2,648 Total Assets LIABILITIES Accounts payable Accruals CURRENT LIABILITIES Long-term debt n debt Equity TOTAL CAPITAL TOTAL LIABILITIES AND EQUITY $1 823 18,854 $20,677 $22.757 $409 22,651 $23.060 $25,708 In addition, HiTech also sold stock for $2.5 million and paid dividends of $3.1 million. No fixed assets were retired during the year. That implies fixed assets purchases and depreciation are the only changes in the gross fixed assets and accumulated depreciation accounts. (15 pts) Calculate HiTech's free cash flows from operations. (5 pts) Using the fundamental accounting identity, A=L+ OE, what were its uses of free cash flows? 3. 2018 (10 pts) (10 pts) The industry norms for year 2x18 are as follows: Industry (2018) 2017 Current ratio 20 Quick ratio 1.5 Avg. collection Period 4 92 days 45.1 Days Days in Inventory 250 Foxed Asset turnover 9 0. 2 2 462 Use the industry norms above and HiTech's financial statements in problem 2 above to assess HiTech's liquidity and asset management