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MBA 6315


MBA 6315 C. Two company scenarios are listed below. Based on the information provided in each scenario, calculate the corresponding (a) Cash Coverage of Growth Ratio and the (b) Free Cash Flows in the columns to the right of each scenario. Your Ratios and Calculations should include the written definition, be labeled clearly, be presented in good form, and utilize cell referencing and formulas where applicable. Scenario 1 (9 points): A Statement of Cash Flows is presented below for Heavy Metal Corporation. Calculate the Cash Coverage of Growth Ratio and the Free Cash Flows for this company. Heavy Metal Company Statement of Cash Flows For the year ending December 31, 2015 Cash Flows from Operating Activities: Cash received from customers $12,88,436 Cash paid to suppliers (5,56,299) Cash paid for selling and administrative expenses (2,76,600) Cash paid for interest (3,500) Cash paid for taxes (25,460) Net Cash Flows Provided by Operating Activities 4,26,577 Cash Flows from Investing Activities: Proceeds from sale of long-term investment 75,000 Purchase of heavy metal delivery truck (84,900) Purchase of new heavy metal storage warehouse (2,82,000) Net Cash Flows Used for Investing Activities (2,91,900) Cash Flows from Financing Activities: Proceeds from new note payable 3,00,000 Payment of principal on bond payable (50,000) Proceeds from issue of common stock shares 41,000 Net Cash Flows Provided by Financing Activities 2,91,000 Net Cash Provided during year 4,25,677 Beginning Cash at January 1, 2015 18,53,908 Ending Cash at December 31, 2015 $22,79,585