Shown are the comparative balance sheets of Dang Corporation for December 31, 2019 and 2018:

	December 31
	2019	2018
Cash and cash equivalents ..................................	$ 350,000	$ 320,000
Accounts receivable .............................................	327,600	356,000
Inventories ...........................................................	822,000	780,000
Available-for-sale securities ................................	0	200,000
Equipment ...........................................................	2,400,000	2,040,000
Accumulated depreciation ...................................	(700,000)	(760,000)
	$3,199,600	$2,936,000
Accounts payable ...............................................	$ 459,000	$ 381,000
Bonds payable, due 2019 ...................................	0	400,000
Common stock, $20 par ......................................	1,800,000	1,600,000
Paid-in capital in excess of par ...........................	280,000	200,000
Retained earnings ...............................................	660,600	355,000
	$3,199,600	$2,936,000

Additional information:

(a)	Net income for 2019, $545,600.
(b)	Depreciation reported on income statement, $140,000.
(c)	Fully depreciated equipment, no salvage value, was scrapped. Equipment was purchased for $560,000.
(d)	Bonds of $400,000 had been issued at par; retirement in 2019 resulted in no gain or loss.
(e)	10,000 shares of common stock were issued for cash at $28 per share.
(f)	Cash dividends declared and paid, $240,000.
(g)	Available-for-sale securities were sold for $300,000.

3-1. Prepare a statement of cash flows for Dang Corporation for 2019, using the indirect method.

3-2. Compute the current cash debt coverage, cash debt coverage, free cash flow, and cash flow to net income ratios

3-3. What does cash debt coverage mean? If this is less than one, what does that imply?

3-4. If cash flow to net income is less than one, what does that mean?

3-5. Interpret the results of the free cash flow ratio you computed in 3-2.