use problem 2 to answer problem 3, please show all work!

thought with only two principles of Tinance. 2. (15 pts) Fitch Inc.'s financial statements are as follows: HiTech, Inc. Balance sheet For Periods that Ended 12/31/x7 and 12/31/x8 (in $000) ASSETS 12/31/x7 $ 2,165 12/31/x8 $ 2,647 Cash HiTech Inc. Income Statement For the Period ended 12/31/x8 (in $000) Sales $40, 506 COGS 14.177 Gross $26,329 Margin Expense 19,487 EBIT $6,842 Interest | 180 EBT $6,662 Tax (34%) 2.265 Net Income $4,397 5,614 2.843 $ 11,104 $39. 456 (24,852) $14,604 $25,708 Accounts receivable 4,832 Inventory 3.217 CURRENT ASSETS S 10.214 Fixed Assets Gross $ 35,183 Accumulated (22,640) Depreciation Net $12, 543 Total Assets $22,757 LIABILITIES Accounts payable $ 1,642 Accruals 1438 CURRENT $ 2,080 LIABILITIES Long-term debt $1,823 Equity 18,854 TOTAL CAPITAL $20,677 TOTAL LIABILITIES $22,757 AND EQUITY $1,420 1,228 $2,648 $409 22,651 $23,060 $25,708 In addition, HiTech also sold stock for $2.5 million and paid dividends of $3.1 million. No fixed assets were retired during the year. That implies fixed assets purchases and depreciation are the only changes in the gross fixed assets and accumulated depreciation accounts. (15 pts) Calculate HiTech's free cash flows from operations. (5 pts) Using the fundamental accounting identity, A = L + OE, what were its uses of free cash flows? 3. (10 pts) (10 pts) The Industry norms for year 2x18 are as follows: 2017 2018 Current ratio Quick ratio Avg. collection Period Days In Inventory Fixed Asset turnover Industry (2018) 2.0 1.5 49.2 days 25.0 0.9 45.1 Days 46.2 2.2 Use the industry nam