Selected 2020 transactions are as follows:

1. Purchased investment securities for $5,800 cash.
2. Borrowed $16,600 on a two-year, 8 percent interest-bearing note.
3. During 2020, sold machinery for its carrying amount; received $12,200 in cash.
4. Purchased machinery for $51,600; paid $9,800 in cash and signed a four-year note payable to the dealer for $41,800.
5. Declared and paid a cash dividend of $10,800 on December 31, 2020.

Selected account balances at December 31, 2019 and 2020 are as follows:

	December 31
	2020			2019
Cash	$	81,600		$	21,800
Accounts receivable		17,800			12,400
Inventory		52,800			61,600
Accounts payable		7,800			11,600
Accrued wages payable		1,200			1,800
Income taxes payable		5,800			3,400

One-fourth of the sales and one-third of the purchases were made on credit.

FRANK CORPORATION
Statement of Earnings
For the Year Ended December 31, 2020
Sales revenue				$	416,000
Cost of sales					276,000
Gross profit					140,000
Expenses
Salaries and wages	$	51,800
Depreciation		10,000
Rent (no accruals)		6,600
Interest (no accruals)		13,000
Income tax		12,600
Total expenses					94,000
Net earnings				$	46,000

Required:

1. Prepare a statement of cash flows for the year ended December 31, 2020 by using the indirect method. (Negative answers should be indicated by a minus sign.)

3. Compute the quality of earnings ratio and the capital expenditures ratio. (Enter your answers in numbers and not in percentages. Round the final answers to 2 decimal places.)