Flamingo, Inc 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less Cost of goods sold 605 Less Depreciation 180 Earnings before interest and taxes 599 Less Interest paid 80 Taxable income 519 Less Taxes 156 Net income $363 Addition to retained earnings $254 Dividends paid 109 Unit 2 Exercise Questions Flamingo, Inc 2018 and 2019 Statement of financial positions ($ in millions) 2018 2019 2018 2019 Cash $100 $121 Accounts payable $400 $350 Accounts rec 350 425 Notes payable 390 370 Inventory 440 410 Total $790 $720 Total $890 $956 Long term debt 500 550 Net fixed assets 1,556 1,704 Owners equity Common stock 600 580 Retained earnings 556 810 Total 1,156 1,390 Total assets $2,446 $2,660 Total liabilities $2,446 $2,660 Q1 Show detailed calculations of CFFA under two approaches we have discussed in our class (60 marks) Q2 Comment on the cashflow performance of the company in the years of 2018 and 2019 ( 20 marks) Q3 If you were to advise Flamingo Inc for the year 2020, what recommendations would you propose regarding the capital structure of the company Why (20 marks) Flamingo, Inc 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less Cost of goods sold 605 Less Depreciation 180 Earnings before interest and taxes 599 Less Interest paid 80 Taxable income 519 Less Taxes 156 Net income $363 Addition to retained earnings $254 Dividends paid 109 Unit 2 Exercise Questions Flamingo, Inc 2018 and 2019 Statement of financial positions ($ in millions) 2018 2019 2018 2019 Cash $100 $121 Accounts payable $400 $350 Accounts rec 350 425 Notes payable 390 370 Inventory 440 410 Total $790 $720 Total $890 $956 Long term debt 500 550 Net fixed assets 1,556 1,704 Owners equity Common stock 600 580 Retained earnings 556 810 Total 1,156 1,390 Total assets $2,446 $2,660 Total liabilities $2,446 $2,660 Q1 Show detailed calculations of CFFA under two approaches we have discussed in our class (60 marks) Q2 Comment on the cashflow performance of the company in the years of 2018 and 2019 ( 20 marks) Q3 If you were to advise Flamingo Inc for the year 2020, what recommendations would you propose regarding the capital structure of the company Why (20 marks)

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Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of goods sold 605 Less: Depreciation 180 Earnings before interest

Flamingo, Inc. 2019 statement of comprehensive income ($ in millions)
Net sales	$1,384
Less: Cost of goods sold	605
Less: Depreciation	180
Earnings before interest and taxes	599
Less: Interest paid	80
Taxable income	519
Less: Taxes	156
Net income	$363
Addition to retained earnings	$254
Dividends paid	109

Unit 2 Exercise Questions

Flamingo, Inc. 2018 and 2019 Statement of financial positions ($ in millions)
	2018	2019		2018	2019
Cash	$100	$121	Accounts payable	$400	$350
Accounts rec.	350	425	Notes payable	390	370
Inventory	440	410	Total	$790	$720
Total	$890	$956	Long-term debt	500	550
Net fixed assets	1,556	1,704	Owners equity
			Common stock	600	580
			Retained earnings	556	810
			Total	1,156	1,390
Total assets	$2,446	$2,660	Total liabilities	$2,446	$2,660

Q1. Show detailed calculations of CFFA under two approaches we have discussed in our class. (60 marks)

Q2. Comment on the cashflow performance of the company in the years of 2018 and 2019.(20 marks)

Q3. If you were to advise Flamingo Inc. for the year 2020, what recommendations would you propose regarding the capital structure of the company? Why? (20 marks)

Flamingo, Inc. 2019 statement of comprehensive income ($ in millions)
Net sales	$1,384
Less: Cost of goods sold	605
Less: Depreciation	180
Earnings before interest and taxes	599
Less: Interest paid	80
Taxable income	519
Less: Taxes	156
Net income	$363
Addition to retained earnings	$254
Dividends paid	109

Unit 2 Exercise Questions

Flamingo, Inc. 2018 and 2019 Statement of financial positions ($ in millions)
	2018	2019		2018	2019
Cash	$100	$121	Accounts payable	$400	$350
Accounts rec.	350	425	Notes payable	390	370
Inventory	440	410	Total	$790	$720
Total	$890	$956	Long-term debt	500	550
Net fixed assets	1,556	1,704	Owners equity
			Common stock	600	580
			Retained earnings	556	810
			Total	1,156	1,390
Total assets	$2,446	$2,660	Total liabilities	$2,446	$2,660

Q1. Show detailed calculations of CFFA under two approaches we have discussed in our class. (60 marks)

Q2. Comment on the cashflow performance of the company in the years of 2018 and 2019.(20 marks)

Q3. If you were to advise Flamingo Inc. for the year 2020, what recommendations would you propose regarding the capital structure of the company? Why? (20 marks)