Case 1, Consider the following Case: Jenny Cochran, a recent graduate of the University of Ottawa with four years of banking experience , was recently brought in as assistant to the chairman of the board of Computron Industries, a manufacturer of computer components. The company doubled its plant capacity opened new sales offices outside its home territory, and launched an expensive advertising campaignComputron's results were not satisfactory . to put it mildlyIts board of directors, which consisted of its president and vice-president plus its major stockholders (who were all local business people), was most upset when directors learned how the expansion was goingSuppliers were being paid late and were unhappy, and the bank was complaining about the deteriorating situation and threatening to cut off creditAs a resultAi Watkins, Computron's president, was informed that changes would have to be made, and quickly, or he would be fired. Also, the board's insistence Donna Jenny Cochran was brought in and given the job of assistant to Gary Meissner, a retired banker who was Computron's chairman and largest stockholderGary agreed to give up a few of his golfing days and to help nurse the company back to health, with Meissner's help. Cochran began by gathering financial statements and other data. Assume that you are Cochran's assistant and you must help her answer the following questions for Gary Cochran began by gathering financial statements and other data that are enclosed herewith Now answer the following question based on available information in the tables below QUESTION: 1. What is 2015 operating current liabilities?2. What is the net operating capital in 20153. What is the total net capital 2015 and 20144. What is the net operating profit after taxes in 20155. What was the free cash flow in 2015

2015 2016 Balance Sheets Assets Cash 9.00 7.282 Short-term investments 48.600 20,000 Accounts receivable 351,200 632.160 Inventories 715,200 1,287,360 Total current assets $1,124,000 $1,946,802 Gross fixed assets 191,000 1,202.950 Less: Accumulated depreciation 146.200 263,160 Net fixed assets $ 344,800 $ 939,790 Total assets $1,468,800 $2,886,592 Liabilities and Equity Accounts payable $ 145,600 $ 324,000 Notes payable 200,000 720,000 Accruals 136,000 284,960 Total current liabilities $ 481,600 $1,328,960 Long-term debt 323,432 1,000,000 Common stock (100,000 shares) 460,000 460,000 Retained earnings 203 768 97.632 Total equity $ 663.768 557-632 Total liabilities and equity $1,468,800 $2,886,592 2015 2016 Income Statements Sales $3,432,000 $ 5,834,400 Cost of goods sold (Excluding depreciation 2,854,000 4,980,000 and amortization) Other expenses 340,000 720,000 Depreciation and amortization 18,900 116,960 Total operating costs $3,222,900 $ 5,816,960 EBIT 209.100 17.440 Interest expense 62,500 176,000 Pre-tax earnings 146,600 ($ 158,560) Taxes (40%) 58,640 (63,424) Net income 87.960 95,136) Other Data 2014 2015 Stock price 8.50 6.00 Shares outstanding 100.000 100.000 EPS $ 0.880 0.951) DPS 0.220 0.1.10 Tax rate 40%% 2016 Statement of Cash Flows Operating Activities Net income ($ 95,136) Adjustments: Noncash adjustments Depreciation and amortization 1 16.960 Changes in working capital: Change in accounts receivable (280.960) Change in inventories (572,160) Change in accounts payable 178.400 Change in accruals 148,960 Net cash provided (used) by operating activities ($ 503,936) Investing Activities Cash used to acquire fixed assets ($ 711.950) Change in short-term investments 28,600 Net cash provided (used) by investing activities ($ 683,350) Financing Activities Change in notes payable $ 520,000 Change in long-term debt 676.568 Change in common stock Payment of cash dividends (1 1,000) Net cash provided (used) by financing activities $1, 185,568 Summary Net change in cash 1,718) Cash at beginning of year 9.000 Cash at end of year 7.282