Gustavs best friend, Garfield, owns a lasagna factory. Garfields financial skills are not very strong, so he asked Gustav to take a look at his financials. Here is the information Garfield provided to Gustav for 2019. - Sales were $23,730; - COGS were $16,780; - Depreciation was $2,840; - Interest paid was $414; - Tax rate was 35% - The paid dividends were $616. Garfield also gathered some balance sheet information for 2018 and 2019. The numbers are presented in the following table. Because Gustav is very busy following the current market developments, he asked you to help him. You must a) Compute the net income b) Compute the operating cash flow c) Compute the free cash flow d) Explain and interpret the positive or negative sign of your answer in part.

For 2018, Current Assets = 2940 | Net Fixed Assets = 16560 | Current Liabilities = 2592

For 2019, Current Assets = 3528 | Net Fixed Assets = 18840 | Current Liabilities = 2484

Check point: OCF = $5,511.50