1. Below is information from the statement of cash flow and income statement for Garland Products, Inc. for 2012 and 2011. Marketable securities represent investments of excess cash that Garland Products does not need for operations. Garland Products' tax rate is 35%.

Cash Flow Statement
(in thousands)
	12/30/2012	12/30/2011
Cash from operations
Net cash provided by operations	106,484	113,880
Cash from investments
(Increase) decrease in property & plant	-31,536	-47,960
Acquisition (disposition) of subsidiaries or other business	-702	-19
Increase (decrease) in marketable securities	-18,825	380,737
Net cash provided by (used in) investing	-51,063	332,758
Cash from financing
Issuances (purchases) of equity shares	-370	-434,570
Issuances (repayment) of debt	-	-
Increase (decrease) in bank, or other borrowings	-25,000	25,000
Dividends, other distributions	-29,377	-37,202
Net cash provided by (used in) financing	-54,747	-446,772
Net change cash & cash equivalents	674	-134
Cash and cash equivalents at start of year	3,255	3,389
Cash and cash equivalents at year end	3,929	3,255
Interest Revenue	50	35
Interest Paid	394	1400

Using the above information calculate the amount of free cash flows to all debt and equity capital stakeholders for Garland Products for year 2012 and 2011

2. The quarterly cash flows from operations for two computer companies are as follows:

(in Millions)	2012	2012	2012	2012	2013
	Q 1	Q2	Q3	Q4	Q 1
Firm A	$406.1	$204.2	$729.1	$440.2	$587.8
Firm B	$136.7	$243.1	$708.2	($87.9(	($161.4)

Required:

1) Explain why Firm B has more credit risk than Firm A.

2) Suppose that Firm B’s cash flow was $200 million higher each quarter. Explain why Firm B might still be viewed as having higher credit risk than Firm A.

3. Morgan Company reported the following items in 2012:

Net income	$40,000
Dividends paid	5,000
Increase in accounts receivable	10,000
Increase in accounts payable	7,000
Purchase of equipment (capital expenditure)	8,000
Depreciation expense	4,000
Issue of notes payable	20,000

Required:

Calculate the following:

(1) net cash provided by operating activities,

(2) the net change in cash during 2012, and

(3) free cash flow.