A comparative balance sheet for Pina Corporation is presented as follows. December 31 Assets 2025 2024 Cash $72,840 $22,000 Accounts receivable 84,300 68,460 Inventory 182,300 191,460 Land 73,300 112,460 Equipment 262,300 202,460 Accumulated depreciation-equipment (71,300) (44,460) Total $603,740 $552,380 Liabilities and Stockholders' Equity Accounts payable $36,300 $49,460 Bonds payable 150,000 200,000 Common stock ($1 par) 214,000 164,000 Retained earnings 203,440 138,920 Total $603,740 $552,380 Additional information: 1. Net income for 2025 was $129,600. No gains or losses were recorded in 2025. 2. Cash dividends of $65,080 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance of common stock. Determine Pina Corporation's current cash debt coverage, cash debt coverage, and free cash flow. (Round current cash debt coverage and cash debt coverage to 2 decimal places., e.g. 0.67:1. Show amount that decrease cash flow with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000).) Current cash debt coverage Cash debt coverage Free cash flow Comment on its liquidity and financial flexibility. -3.92 :1 0.96 :1 38520 Pina has excellent liquidity. Its financial flexibility is good

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 19P
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A comparative balance sheet for Pina Corporation is presented as follows.
December 31
Assets
2025
2024
Cash
$72,840
$22,000
Accounts receivable
84,300
68,460
Inventory
182,300
191,460
Land
73,300
112,460
Equipment
262,300
202,460
Accumulated depreciation-equipment
(71,300) (44,460)
Total
$603,740 $552,380
Liabilities and Stockholders' Equity
Accounts payable
$36,300
$49,460
Bonds payable
150,000
200,000
Common stock ($1 par)
214,000
164,000
Retained earnings
203,440
138,920
Total
$603,740
$552,380
Additional information:
1.
Net income for 2025 was $129,600. No gains or losses were recorded in 2025.
2.
Cash dividends of $65,080 were declared and paid.
3.
Bonds payable amounting to $50,000 were retired through issuance of common stock.
Transcribed Image Text:A comparative balance sheet for Pina Corporation is presented as follows. December 31 Assets 2025 2024 Cash $72,840 $22,000 Accounts receivable 84,300 68,460 Inventory 182,300 191,460 Land 73,300 112,460 Equipment 262,300 202,460 Accumulated depreciation-equipment (71,300) (44,460) Total $603,740 $552,380 Liabilities and Stockholders' Equity Accounts payable $36,300 $49,460 Bonds payable 150,000 200,000 Common stock ($1 par) 214,000 164,000 Retained earnings 203,440 138,920 Total $603,740 $552,380 Additional information: 1. Net income for 2025 was $129,600. No gains or losses were recorded in 2025. 2. Cash dividends of $65,080 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance of common stock.
Determine Pina Corporation's current cash debt coverage, cash debt coverage, and free cash flow. (Round current cash debt
coverage and cash debt coverage to 2 decimal places., e.g. 0.67:1. Show amount that decrease cash flow with either a-sign e.g.-15,000 or
in parenthesis e.g. (15,000).)
Current cash debt coverage
Cash debt coverage
Free cash flow
Comment on its liquidity and financial flexibility.
-3.92
:1
0.96
:1
38520
Pina has excellent
liquidity. Its financial flexibility is good
Transcribed Image Text:Determine Pina Corporation's current cash debt coverage, cash debt coverage, and free cash flow. (Round current cash debt coverage and cash debt coverage to 2 decimal places., e.g. 0.67:1. Show amount that decrease cash flow with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000).) Current cash debt coverage Cash debt coverage Free cash flow Comment on its liquidity and financial flexibility. -3.92 :1 0.96 :1 38520 Pina has excellent liquidity. Its financial flexibility is good
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