C. Use the financial data presented to determine Tracks operating cash flow (OCF) and free cash flow (FCF) in 2015. Evaluate your findings in light of Tracks current cash flow difficulties.

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Seven years ago, after 15 years in public accounting, Stanley Booker, CPA,resigned his position as manager of cost systems for Davis, Cohen, and OBrien Public Accountants and started Track Software, Inc. In the 2 years preceding his departure from Davis, Cohen, and OBrien, Stanley had spent nights and weekends developing a sophisticated cost-accounting software program that became Tracks initial product offering. As the firm grew, Stanley planned to develop and expand the software product offerings, all of which would be related to streamlining the accounting processes of medium- to large-sized manufacturers. Although Track experienced losses during its first 2 years of operation2009 and 2010its profit has increased steadily from 2011 to the present (2015). The firms profit history, including dividend payments and contributions to retained earnings, is summarized in Table 1.Stanley started the firm with a $100,000 investment: his savings of $50,000 as equity and a $50,000 long-term loan from the bank. He had hoped to maintain his initial 100 percent ownership in the corporation, but after experiencing a $50,000 loss during the first year of operation (2009), he sold 60 percent of the stock to a group of investors to obtain needed funds. Since then, no other stock transactions have taken place. Although he owns only 40 percent of the firm, Stanley actively manages all aspects of its activities; the other stockholders are not active in management of the firm. The firms stock was valued at $4.50 per share in 2014 and at $5.28 per share in 2015.

TABLE1 Track Software, Inc., Profit, Dividends, and Retained Earnings, 2009-2015 Dividends paid Net profits after taxes Contribution to retained earnings [(1) (2) Year 2009 2010 2011 2012 2013 2014 2015 (S 50,000) (20,000) 15,000 35,000 40,000 43,000 48,000 0 0 0 1,000 3,000 5,000 ($50,000) (20,000) 15,000 35,000 39,000 40,000 43,000