ended December 31 , 2015 , using Equation 4.1 . b . Calculate the firm ’ s operating cash flow ( OCF ) for the year ended
December 31 , 2015 , using Equation 4.3 . c . Calculate the firm ’ s free cash flow ( FCF ) for the year ended December
31 , 2015 , using Equation 4.4 . d . Interpret , compare , and contrast your cash flow estimates in parts b and c .
P4 – 19 Integrative : Pro forma statements Red Queen Restaurants wishes to prepare financial plans . Use the financial statements and the other information provided below to prepare the financial plans .
The following financial data are also available : ( 1 ) The firm has estimated that its sales for 2016 will be $ 900,000 . ( 2 ) The firm expects to pay $ 35,000 in cash dividends in 2016 . ( 3 ) The firm wishes to maintain a minimum cash balance of $ 30,000 . ( 4 ) Accounts receivable represent approximately 18 % of annual sales . ( 5 ) The firm ’ s ending inventory will change directly with changes in
sales in 2016 . ( 6 ) A new machine costing $ 42,000 will be purchased in 2016 . Total
depreciation for 2016 will be $ 17,000 . ( 7 ) Accounts payable will change directly in response to changes in
sales in 2016 . ( 8 ) Taxes payable will equal one-fourth of the tax liability on the pro