evenue and expenses for the first year of operations are as follows: Revenue $12,000,000; Cost of Goods Sold $6,000,000; Selling and Administrative Expenses $2,000,000; Depreciation Expense $80,000; Interest Expense $50,000; and Income Tax Expense $500,000. The company declared and paid dividends of $200,000 during the year. The company uses the straight-line method to depreciate its office equipment. The company's accountant has prepared the following financial statements for the year ended December 31, 2019. Mountain Spring Distributors Limited Statement of Financial Position December 31, 2019 Assets Current Assets Cash $500,000 Accounts Receivable $1,000,000 Inventory $1,500,000 Prepaid Expenses $50,000 Total Current Assets $3,050,000 Non-Current Assets Delivery Trucks $16,000,000 Less: Accumulated Depreciation ($80,000) $15,920,000 Office Equipment $500,000 Less: Accumulated Depreciation ($50,000) $450,000 Total Non-Current Assets $16,370,000 Total Assets $19,420,000 Liabilities and Equity Current Liabilities Accounts Payable $800,000 Accrued Expenses $200,000 Total Current Liabilities $1,000,000 Non-Current Liabilities Long-Term Debt $5,000,000 Total Non-Current Liabilities $5,000,000 Total Liabilities $6,000,000 Equity Share Capital $12,000,000 Retained Earnings $1,420,000 Total Equity $13,420,000 Total Liabilities and Equity $19,420,000 Mountain Spring Distributors Limited Statement of Comprehensive Income For the Year Ended December 31, 2019 Revenue $12,000,000 Cost of Goods Sold $6,000,000 Gross Profit $6,000,000 Selling and Administrative Expenses $2,000,000 Depreciation Expense $80,000 Interest Expense $50,000 Income Before Tax $3,870,000 Income Tax Expense $500,000 Net Income $3,370,000 Other Comprehensive Income $50,000 Total Comprehensive Income $3,420,000 Required: 1. Prepare the statement of cash flows for Mountain Spring Distributors Limited for the year ended December 31, 2019, using the indirect method. 2. Calculate the following financial ratios for Mountain Spring Distributors Limited for the year ended December 31, 2019: a. Current Ratio b. Acid-Test Ratio c. Inventory Turnover d. Accounts Receivable Turnover e. Debt to Equity Ratio f. Return on Assets g. Return on Equity 3. Based on the financial statements provided, write a brief analysis of the company's financial performance for the year ended December 31, 2019. 4. Discuss any limitations of financial ratio analysis. 5. What additional information would you require to conduct a more comprehensive analysis of Mountain Spring Distributors Limited's financial performance? 6. What recommendations would you make to the management of Mountain Spring Distributors Limited based on your analysis of the company's financial performance for the year ended December 31, 2019?