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

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 (1)Cash Flow From Assets (CFFA) = Cash Flow to Bondholders + Cash Flow to Shareholders AND (2)Cash Flow From Assets = Operating Cash Flow Net Capital Spending Changes in NWC we have discussed in our class. (60 marks)

Q2. Comment on the cash flow 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)