The following selected financial statement information is for Stevens Company. (18 Points)

December 31

2017 2016 Changes in assets

Current Assets

Cash $86,000 $71,000

Accounts receivable 24,000 20,000

Merchandise inventory 20,000 27,000

Prepaid expenses 10,000 8,000

Current Liabilities

Accounts payable 41,000 44,000

Income taxes payable 6,000 11,000

Other data for the Year Ended December 31, 2017

From the income statement:

Net income $146,000

Depreciation expense 32,000

Loss on sale of equipment 9,000

From accounting records:

Capital expenditures 44,000

Required:

a. Using the indirect method, prepare the operating activities section of the statement of cash flows for Stevens Company for the year ended December 31, 2017.

b. Calculate the following cash measures:

(1) Operating cash flow ratio (round to the nearest tenth of a percent).

(2) Capital expenditure ratio (round to the nearest tenth of a percent).

(3) Free cash flow.,