Information for Frank and Merle’s Bowling Goods Pty Ltd has been extracted from their financial statements and is presented below.

Information relating to the year ended 30 June 2017 is as follows.

Required
a. Calculate the net cash flows from operating activities.
b. Compute the cash adequacy ratio, the cash flow ratio, the debt coverage ratio and the cash flow to sales ratio.

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Total current liabilities Total non-current liabilities Trade debtors Trade creditors Accrued expenses Income tax payable Prepaid expenses Inventory 30 June 2017 $100 000 20 700 67 100 51 200 12200 36 600 9 200 11 700 30 June 2016 $90 300 24 400 61 000 43 900 15 900 30 500 11 000 14 600