Exercise 11-38 (Algorithmic) Analyzing the Statement of Cash Flows

Information for Ditka Inc. and McMahon Company is given below:

	Ditka Inc	McMahon Company
Cash provided by operating activities	$2,475,000	$1,639,000
Capital expenditures	1,157,000	748,000
Dividends	305,000	191,000
Average debt maturity over next 5 years	1,988,000	1,212,000

1. Compare Ditka's and McMahon's free cash flow and cash flow adequacy ratio. Round ratio to two decimal places.

	Free Cash Flow	Adequacy Ratio
Ditka Inc.	$
McMahon Company	$

2. Conceptual Connection: What information do these cash-based performance measures provide with regard to the two companies?

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