I do not understand how to do this:

Current cash debt coverage ratio		:1
Cash debt coverage ratio		:1
Free cash flow	$

Comment on its liquidity and financial flexibility.

Shabbona has

liquidity. Its financial flexibility is .

A comparative balance sheet for Shabbona Corporation is presented below.

December 31
Assets	2014	2013
Cash	$72,889	$22,000
Accounts receivable	83,946	68,057
Inventory	181,946	191,057
Land	72,946	112,057
Equipment	258,054	197,943
Accumulated Depreciation-Equipment	(70,946	)	(44,057	)
Total	$598,835		$547,057
Liabilities and Stockholders' Equity
Accounts payable	$35,946	$49,057
Bonds payable	150,000	200,000
Common stock ($1 par)	214,000	164,000
Retained earnings	198,889		134,000
Total	$598,835		$547,057

Additional information:

1.	Net income for 2014 was $128,892.
2.	Cash dividends of $64,003were declared and paid.
3.	Bonds payable amounting to $50,000were retired through issuance of common stock.

(a)

	Your answer is correct.

Prepare a statement of cash flows for 2014 for Shabbona Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Shabbona Corporation Statement of Cash Flows For the Year Ended December 31, 2014

	$
Adjustments to reconcile net income to

	$

	$

Issued common stock to retire $ of bonds outstanding