Question

Nancy & Donald Corp. is preparing its annual financial statements as of December 31, 2019. Listed below are Balance Sheets for 2019 and 2018 as well as the Income Statement for 2019. Cash Flow statement is missing.

Balance Sheets	2018	2019		Income Statement	2019
$ in millions				$ in millions
Assets				Net revenues	610
Cash	25	55		COGS	280
Accounts receivable	160	130		Depreciation expense	50
Prepaid Expense	10	30		Earnings before interest
Inventory	220	285		and taxes (EBIT)	280
Total Current Assets	415	500		Interest expense	20
				Profit before tax	260
Net PP&E	485	600		Taxes paid	60
Total Assets	900	1100		Net income	200
Liabilities and equity				Dividends declared and paid	100
Accounts payable	50	80
Notes payable	70	85
Other short term debt	40	55
Total Current Liabilities	160	220
Long-term debt	105	125
Shareholders’ equity
Common stock	240	260
Retained earnings	395	495
Total Shareholder's Equity	635	755
Total liabilities and equity	900	1100

1. Prepare (show the “waterfall”) the 2019 statement of cash flows for Nancy & Donald Corp.
2. What is the amount of cash flow from Operations for 2019 ?
3. What is the amount of Free Cash Flow for 2019 ?
4. What is the change in cash for 2019 ?

Answer 1