Given the following financial statements for V-S, a voice recognition company, answer the questions on the next page.

Income Statement for years
	20x2	20x1
Sales	$5,500	$5,000
Operating Costs excluding Depreciation and Amortization	4,675	4,250
EBITDA	825	750
Depreciation and Amortization	190	180
EBIT	$635	$570
Interest Expense	62	50
EBT	$573	$520
Taxes (40%)	229	208
NI	$344	$312

Balance Sheet for years ending December 31
	20x2	20x1
Assets:
Cash	$275	$250
Short Term Investments	55	50
Accounts Receivable	1,375	1,250
Inventories	825	750
Total Current Assets	$2,530	$2,300
Net Plant and Equipment	1,925	1,750
Total Assets	$4,455	$4,050
Liabilities:
Notes Payable	$192	$100
Accounts Payable	580	500
Miscellaneous Payables	245	250
Total Current Liabilities	$1,017	$850
Long-Term Debt	550	500
Total Liabilities	$1,567	$1,350
Common Stock	2200	2,200
Retained Earnings	734	500
Less Treasury Stock	(46)	0
Total Shareholder Equity	$2,888	$2,700
Liabilities and Shareholder Equity	$4,455	$4,050

Cash Flow Statement for year ending December 31, 200x
Operating Activities
Net Income	$344
Depreciation and Amortization	190
Increase in Accounts Receivables	(125)
Increase in Inventories	(75)
Increase in Accounts Payables	80
Decrease in Miscellaneous Payables	(5)
Net Cash Provided by Operations	409
Investing Activities
Purchase of equipment	(365)
Increase in Short Term Investments	(5)
Net Cash Used for Investment Activities	(370)
Financing Activities
Dividends paid	(110)
Increase in Notes Payable	92
Increase in Long Term Debt	50
Purchase stock for Treasury	(46)
Net Cash used for Financing Activities	(14)
Beginning Cash Balance January 1, 20x2	250
Ending Cash Balance December 31, 20x2	275
Net Cash Flow	$25

1. Develop Free Cash Flow for 20X2 from the income statement, balance sheet and cash flow statement above. Discuss the difference between free cash flow and the firms statement of cash flows.

2. Develop, label and analyze the results of an extended DuPont equation based on 20x1 and 20x2.