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A comparative balance sheet for Indigo Corporation is presented as follows. December 31 Assets 2020 2019 Cash $ 72,900 $ 22,000 Accounts receivable 84,190 68,290
A comparative balance sheet for Indigo Corporation is presented as follows.
December 31 | ||||||
Assets | 2020 | 2019 | ||||
Cash | $ 72,900 | $ 22,000 | ||||
Accounts receivable | 84,190 | 68,290 | ||||
Inventory | 182,190 | 191,290 | ||||
Land | 73,190 | 112,290 | ||||
Equipment | 262,190 | 202,290 | ||||
Accumulated Depreciation-Equipment | (71,190 | ) | (44,290 | ) | ||
Total | $603,470 | $551,870 | ||||
Liabilities and Stockholders' Equity | ||||||
Accounts payable | $ 36,190 | $ 49,290 | ||||
Bonds payable | 150,000 | 200,000 | ||||
Common stock ($1 par) | 214,000 | 164,000 | ||||
Retained earnings | 203,280 | 138,580 | ||||
Total | $603,470 | $551,870 |
Additional information:
1. | Net income for 2020 was $129,380. No gains or losses were recorded in 2020. | |
2. | Cash dividends of $64,680 were declared and paid. | |
3. | Bonds payable amounting to $50,000 were retired through issuance of common stock. |
Determine Indigo Corporations current cash debt coverage, cash debt coverage, and free cash flow. (Round current cash debt coverage and cash debt coverage to 2 decimal places., e.g. 0.67.)
Current cash debt coverage | :1 | ||
Cash debt coverage | :1 | ||
Free cash flow | $ |
Comment on its liquidity and financial flexibility.
Indigo has poorexcellent liquidity. Its financial flexibility is goodbad. |
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