Analyzing Cash Flow Ratios Pearce Enterprises reported the following information for the past

year of operations:

Transaction

Free

Cash Flow

$250,000

Operating-Cash-

Flow-to-Current-

Liabilities Ratio

1.0 times

Operating-Cash-

Flow-to-Capital-

Expenditures

Ratio

3.0 times

a.

Recorded credit sales of $9,000

b.

Collected $4,000 owed from customers

c.

Purchased $28,000 of equipment on

long-term credit

d.

Purchased $16,000 of equipment for

cash

e.

Paid $10,000 of wages with cash

f.

Recorded utility bill of $1,750 that has

not been paid

For each transaction, indicate whether the ratio will (I) increase, (D) decrease, or (N) have no effect.