Given the balance sheets and selected data from the income statement of SMG Industries that follow, answer parts (a)(c).

a. Calculate the companys operating cash flow (OCF) for the year ended 30 June 2016,

b. Calculate the companys free cash flow (FCF) for the year ended 30 June 2016

c. Interpret, compare, and contrast your cash flow estimates in parts (a) and (b).

SMG Industries Balance Sheet (in $ millions)

Assets	30 June 2016	30 June 2015	Liabilities and Share-holders Equity	30 June 2016	30 June 2015
Cash	$ 3,500	$ 3,000	Accounts payable	$ 3,600	$ 3,500
Marketable securities	3,800	3,200	Notes payable	4,800	4,200
Accounts receivable	4,000	3,800	Accruals	1,200	1,300
Inventories	4,900	4,800	Total current liabilities	$ 9,600	$ 9,000
Total current assets	$16,200	$14,800	Long-term debt	6,000	6,000
Gross fixed assets	$31,500	$30,100	Total liabilities	$15,600	$15,000
Less: Accumulated depreciation	14,700	13,100	Ordinary shares	$11,000	$11,000
Net fixed assets	$16,800	$17,000	Retained earnings	6,400	5,800
Total assets	$33,000	$31,800	Total shareholders equity	$17,400	$16,800
			Total liabilities and shareholders equity	$33,000	$31,800

Income Statement Data (2016, in $ millions)

Depreciation expense	$1,600
Earnings before interest and taxes (EBIT)	4,500
Taxes	1,300
Net profits after taxes	2,400