Scenario $1(13$ 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 $31,2019$

Cash Flows from Operating Activities:

Cash received from customers $$1,289,970$

Cash paid to suppliers $(556,400)$

Cash paid for selling and administrative expenses $(267,600)$

Cash paid for interest $(2,500)$

Cash paid for taxes $(23,960)$

Net Cash Flows Provided by Operating Activities $439,510$

The goal is to achieve adequate cash available, which in turn means more continued growth of assests. Basically, the higher the number achieved the better. High growth potential is the goal, and if the number ends up under $1...$ there is low growth potential.

Cash Flows from Investing Activities:

Proceeds from sale of long$-$term investment $73,000$

Purchase of heavy metal delivery truck $(83,000)$

Purchase of new heavy metal storage warehouse $(309,000)$

Net Cash Flows Used for Investing Activities $(319,000)$

Cash Flows from Financing Activities:

Proceeds from new note payable $320,000$

Payment of principal on bond payable $(40,000)$

Proceeds from issue of common stock shares $30,000$

Net Cash Flows Provided by Financing Activities $310,000$

Net Cash Provided during year $430,510$

Beginning Cash at January $1,20191,253,660$

Ending Cash at December $31,2019$ $$1,684,170$